Preamble

The House met at half-past Two o 'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

ACCOMMODATION LEVEL CROSSINGS BILL [Lords] (By Order)

Order for Third Reading read.

To be read the Third time on Wednesday 19 July.

LONDON LOCAL AUTHORITIES (NO. 2) BILL [Lords] (By Order)

Order for consideration, as amended, read.

To be considered on Tuesday 18 July.

CITY OF WESTMINSTER BILL [Lords] (By Order)

Order read for resuming adjourned debate on Question [26 June].

Debate to be resumed on Wednesday 19 July.

Oral Answers to Questions — TREASURY

Inflation Prospects

Mr. Riddick: To ask the Chancellor of the Exchequer if he will outline the prospects for inflation. [32468]

Mr. Austin-Walker: To ask the Chancellor of the Exchequer what he expects the rate of inflation to be at the end of 1995. [32557]

The Chancellor of the Exchequer (Mr. Kenneth Clarke): I expect inflation to increase a little towards the end of 1995, to 3 per cent. in the fourth quarter. That increase reflects the impact of higher import prices, and is expected to be temporary. I expect inflation to fall back during 1996, to 2½ per cent. by the fourth quarter.

Mr. Riddick: Does my right hon. and learned Friend agree that low inflation is a crucial factor in the creation of more wealth, more investment and more jobs? Does not he find absurd the way in which the shadow Chancellor on one hand appears to be for ever calling for lower interest rates but on the other has started to criticise my right hon. and learned Friend for not agreeing with the Governor of the Bank of England, who wants interest rates to increase? Will he assure the House that his inflation policy will be based on sound economics and not soundbites, so beloved by the hon. Gentleman?

Mr. Clarke: I agree with my hon. Friend that the overriding aim of all economic policy is increased prosperity and more secure jobs. It is essential that we

deliver low inflation in order to guarantee those and deliver those. We have been more successful on the inflation front in the past two years than at any time in the past 30 years. That has been as a result of the conduct of monetary policy and the determination of the Governor and myself to take no risks with inflation.
The Opposition always used to demand lower interest rates, come what may. Even in the late 1980s, they were demanding lower interest rates when they had to increase. The hon. Member for Dunfermline, East (Mr. Brown) always used to demand lower interest rates on every occasion, but he has stopped doing that for the past six months. As far as I can see, he has no opinion at all about interest rates or inflation that he will share with anyone at the moment.

Mr. Austin-Walker: Today's inflation rates show that the figures have already exceeded the figures that the Chancellor estimated in his Budget speech. The Chancellor of the Exchequer has given several different figures at different times. Would he say what he really anticipates the figure to be? Does the Governor of the Bank of England agree with his optimism about inflation rates and, more importantly, in his estimates has he consulted the First Secretary?

Mr. Clarke: The figures today entirely coincide with the summer forecast, which we debated yesterday, and the answer that I have just given about the likely pattern of inflation. There is absolutely no doubt about the inflation target among anyone who takes it seriously; it is 2½ per cent or less by the end of this Parliament and through the next Parliament. People try to reinterpret that, but I set the policy. They are my decisions and I repeatedly say plainly on what basis I am setting them all the time. I work with the Governor of the Bank of England, with whom I discussed those decisions, and he and I are determined to achieve the Government's stated inflation target.

Sir Peter Tapsell: May I congratulate my right hon. and learned Friend on the impeccable judgment on interest rates that he has shown so far, especially in resisting the considerable pressures for him to increase interest rates a few weeks ago, just before the American and Japanese rates were lowered, and set off a world bull market in bonds?

Mr. Clarke: I always have the greatest respect for my hon. Friend's advice. That is because he is always constructively but fairly critical when he feels critical and I am grateful for his agreement when he gives it. I believe that the economic evidence supports the decision that I took. I am grateful to know that it has his full support. I do wish that someone on the Opposition Benches had a serious opinion to offer on the subject.

Mr. Malcolm Bruce: Does the Chancellor accept that irresponsible tax cuts would worsen the outlook for inflation? Does he accept the discipline of his own words—that public borrowing is taxation deferred? Does he accept that, if he introduced tax cuts which could be funded only by increased borrowing, they would be bad for inflation and would have to be reversed soon afterwards, perhaps after a general election?

Mr. Clarke: I hope that we are all against irresponsible tax cuts. I am against doing anything that is irresponsible. We will not have tax cuts unless we can afford it. What


we have done so far is to halve the public sector borrowing requirement over the past two years and we have set it on a firm downward course, aiming at our clearly stated intention of achieving balance over the medium term. Tax cuts will come, but only when we can afford them and when it is in the interests of the economy to have tax cuts.

Mr. Darling: Inflation has edged up today. Can the Chancellor explain why it has now emerged that the Central Statistical Office wrongly calculated the rate of inflation over the past few months and understated the rate of inflation? Can he also explain why he insists on maintaining not just one but three different targets for inflation? He used the figure of 2½ per cent. for the City and the figure of 3 per cent., which he said would be a triumph, for a newspaper interview.
In his own hand, the right hon. and learned Gentleman wrote to the Chairman of the Select Committee on the Treasury and Civil Service saying that his target was in the range of 1 per cent. to 4 per cent. most of the time—in other words, not all the time. Is it any wonder that people do not believe him when he says that he has a target? Is it any wonder that people believe that the Government will take risks with inflation if that is what it takes to win the next election?

Mr. Clarke: First, it is true that an error was made in calculating inflation for two months earlier this year. The Central Statistical Office has explained that it was a straightforward error. Someone made an error in the calculation which led to an under-recording by 0.1 percentage points in the months of March and May 1995. The new director insists, in his press release, on accepting personal responsibility for this, although he has been in post for only a fortnight. It was one of those human errors which we all make.
Secondly, I find this level of political debate absurd. One thing that I do in explaining Government policy is to state clearly what the objectives are. The inflation forecast is 2½ per cent. or less. In the same way, the Prime Minister and I made perfectly clear our attitudes towards such things as inheritance tax and capital gains tax. The press is capable of taking any daft half-quotation to claim that what we say is not what we claim to say. These bad habits are extending even to the Chamber and are lowering the Opposition's performance. I could not have been clearer in every statement I have made that the inflation target is 2½per cent. or less from the end of this Parliament. I set the policy and I am telling the hon. Gentleman what the policy is on which I set other policies.

Mr. Ian Bruce: Will my right hon. and learned Friend resist the calls which come from some people who say that a bit of inflation would be good for negative equity and for house owners? Does he agree that there has never been a better time in the past decade or so for people to buy their first new home? We have low inflation rates which means low interest rates. That makes buying one's own home very affordable and that is the right way in which to get the house market moving again.

Mr. Clarke: I agree strongly with my hon. Friend. If the public feared that we were going back to what would begin as a bit of inflation, which would mean higher interest rates and the old double figure levels, it would be extremely damaging to the housing market. It is the fact that some people still fear that we may do that that is

holding back purchasers from the excellent bargains at affordable prices in the market. I hope that the expert opinion of people such as our hon. Friend the Member for East Lindsey (Sir P. Tapsell), with his view about where interest rates are likely to go—at a time when they are well below half the peak that they hit at similar stages in the economic cycle in the past—will have some effect on those contemplating house purchases.

Low Pay and Unemployment

Mr. Robert Ainsworth: To ask the Chancellor of the Exchequer what is his assessment of the economic impact of low pay and unemployment. [32548]

The Chief Secretary to the Treasury (Mr. William Waldegrave): Low pay and unemployment result from low productivity and inflexible labour markets. Government policies have successfully tackled these problems. Real take-home pay has risen at all levels since 1979 and unemployment has fallen by 661,000 since December 1992.

Mr. Ainsworth: Is it not a fact that low pay is now costing every taxpayer £100 a year? Is that subsidy for bad employers a good use of £2.4 billion of public money? Is it not a fact that without a minimum wage, the good employer is undermined by the bad employer, who is undermined by the worst employer, and that the taxpayer winds up picking up the tab?

Mr. Waldegrave: I am very surprised that the hon. Gentleman should lead with an argument for the minimum wage. One of the most robust Labour politicians I know, the deputy leader of the Labour party, said:
I knew the consequences of a minimum wage were that there'd be some shake out, any silly fool knew that".
To bring the script up to date, Lord Healey—the only Labour politician I know who is more robust than the deputy leader—said:
Don't kid yourselves—the minimum wage is something on which unions will build differentials … Therefore the minimum wage becomes a floor on which you erect a new tower".
Those are the facts, and the people with courage in the Labour party know that they are the facts.

Mr. Dunn: Can my right hon. Friend inform the House how those on low pay or the unemployed would benefit from the introduction of a minimum wage, given that a minimum wage would destroy jobs and be a nightmare in the labour market?

Mr. Waldegrave: The irony must be that either one sets the minimum wage so low that it does not affect anything, or one moves differentials—unless the trade union movement has completely abandoned virtually everything that it stands for. Common sense tells us that the minimum wage will destroy jobs and that it will not benefit the unemployed one whit.

Mr. Skinner: Is the Minister aware that some of us have a figure for the minimum wage? We have done a comparison of those Tory Members of Parliament who receive £10,000 a year from consultancies that they do not declare in the Register. Some £10,000 a year is £5 an hour and the people in my constituency would settle for that. Unlike the moonlighting Tory Members of Parliament, my constituents want only one job.

Mr. Waldegrave: It is not uncharacteristic for the hon. Gentleman to have the courage of his convictions. He has


put a figure of £5 an hour on the minimum wage. Let us have a figure from the Labour Front Bench. If Labour Members below the Gangway have the courage to give a figure, why will those on the Front Bench not do the same?

Mr. Harry Greenway: Has my right hon. Friend estimated the number of jobs that would be lost if the minimum wage were pitched at the level suggested by the Transport and General Workers Union? Does he not think—[Interruption.] The hon. Member for Worsley (Mr. Lewis) should wake up—and so should the hon. Member for Bolsover (Mr. Skinner). Does my right hon. Friend not think that people are most motivated and happiest when they are in work, even if they are not paid £1 million a year for doing the job?

Mr. Waldegrave: The estimates vary, but I have seen an estimate of anything around three quarters of a million jobs. On the basis of the figure advanced from below the Gangway opposite, it would probably be a little higher than that.

Trade Balance

Mrs. Helen Jackson: To ask the Chancellor of the Exchequer if he will make a statement on the economic impact of the latest balance of trade figures. [32549]

Mr. Waldegrave: Recent growth has been export led. In the year to the first quarter of 1995, exports were 9 per cent., while imports rose by only 0.5 per cent. That means that more than half of the United Kingdom's gross domestic product growth of nearly 4 per cent. is accounted for by net exports.

Mrs. Jackson: Does the Minister not see that our very weak trade position—a £1.4 billion deficit in April—reflects the Government's failure to invest in the economy? Does he not understand that the people in the special steel sector in south Yorkshire want to see a doubling of investment in jobs, skills and technology? How can the Minister justify possibly wasting £4 billion by reducing capital gains tax and inheritance tax rather than investing in our manufacturing base?

Mr. Waldegrave: The country's trade performance is extremely good. It is very much better than most forecasters predicted—including the forecasts that came from the Labour Front Bench in the days when Labour Front Benchers used to give forecasts. The hon. Lady referred to the steel industry. British Steel is one of the best steel companies in the world and it is exporting very strongly. That was not the case when it was nationalised. Any tax changes that may be introduced—when we can afford them—which will help capital markets and the economy will only strengthen that position.

Mr. Spring: Does my right hon. Friend recall that economic recoveries since the war have been blighted time and again by balance of payments crises? Does he agree that the present economic recovery is precisely the opposite, in as much as we are seeing an astonishingly good export performance?

Mr. Waldegrave: It is the first recovery since the war that has been led by exports. It used to be the holy grail that we all sought, and the country can be proud of achieving it. Above all, manufacturing industry, and the

invisibles sector too, can be proud of it. If a few years back we had been told that the United Kingdom would, for example, export more televisions and microchips than either France or Germany, as we did last year, people would have thought that we were in cloud cuckoo land. Yet that is what we are now achieving.

Mr. Milburn: Can the Chief Secretary confirm that our weak balance of trade position is a reflection of the Government's failure to secure adequate investment in the economy? Which areas of investment does he propose to cut to finance the abolition of capital gains tax and inheritance tax?

Mr. Waldegrave: The premise of the hon. Gentleman's question is absurd. The trade position is extremely strong. I would like to know why he thinks that, under the Labour party's proposals, which are the same old proposals for directed investment, he would not produce more advanced gas-cooled reactors, more Concordes and more of those pretty catastrophic investment proposals which were produced in the past by that very system.

Investment Level

Mr. Betts: To ask the Chancellor of the Exchequer what proposals he has to increase the level of investment in the economy. [32551]

The Economic Secretary to the Treasury (Mrs. Angela Knight): Our objectives of low inflation and sound public finances are designed to ensure a stable macroeconomic environment, within which businesses can plan ahead with confidence. Industry is now responding. Manufacturing investment rose by more than 6½ per cent. last year.

Mr. Betts: Given that, between 1979 and 1994, Britain had the worst investment record of any of the G7 or European Union countries, and given that manufacturing investment fell in the first quarter of this year and that total investment is still 10 per cent. below its level prior to the recession, will the Economic Secretary answer the question which the Chief Secretary has failed to answer on two occasions? When resources become available, will the Government use them to assist investment in this country or will they waste them by spending £4 billion of public money on cutting inheritance tax and capital gains tax, which will benefit only a few relatively affluent people and do nothing to improve the underlying capacity of our economy? Will she answer that question?

Mrs. Knight: I find it very difficult to take seriously anything that the hon. Gentleman says about investment, as when he had opportunities and was in charge of Sheffield city council, he wasted £150 million building palaces of leisure for the world student games. That financial millstone has hung around the neck of everybody in that city for a generation. However, he will be pleased to learn that the latest investment figures show a strong pick-up in manufacturing, especially in the north of England.

Sir Timothy Sainsbury: May I first congratulate my hon. Friend on her very well deserved promotion to the Treasury Bench? I am sure that I speak for all Conservative Members in so doing. Does she agree that


most investment, particularly in industrial companies, is funded from retained profits and therefore we should all welcome the increased profitability of British companies?

Mrs. Knight: I thank my right hon. Friend for his kind remarks. I entirely agree with his point. Since company profits are high, companies are managing to retain far more money which they can use for investment, to the benefit of companies and the country.

Mr. Beggs: Does the Minister agree that the availability of a highly skilled, well-qualified work force is always attractive to inward investors? Does she also agree that each right hon. and hon. Member has a duty to encourage teachers, students and those presently unemployed to obtain qualifications and skills in order to attract inward investment and generate wealth-creating jobs from which the whole economy will benefit?

Mrs. Knight: I agree with the hon. Gentleman. Education and training are very important indeed, which is why the Government have given them such a high priority. Since we are attracting so much investment into the United Kingdom, we are obviously doing a very good job in that respect.

Mr. Allason: Does my hon. Friend agree that the best way to improve the level of investment is to reduce bureaucracy, red tape and interference not only by local government and national Government, but by the European Union?

Mrs. Knight: My hon. Friend makes a very fair point. As part of my job, I shall certainly scrutinise European regulations to ensure that they benefit British industry.

Ms Armstrong: While I welcome the Minister to her first Question Time, can she tell us why manufacturing investment fell in the first quarter of this year? Is she confident that she will be able to sort out the fact that total investment is 10 per cent. lower than it was in 1989 before the recession? With all that going on, how does she justify the priority given to getting rid of capital gains tax and inheritance tax?

Mrs. Knight: The hon. Lady has been mixing her figures. I am sure that she will be delighted to learn that there is a strong pick-up in manufacturing investment, which increased by 8¾ per cent. in the first quarter of this year over the same period in 1994. That is an increase, not a reduction. One factor that aids investment in British industry is a strong economic climate. We have one now and will continue to have one.

Correspondence

Mr. Thurnham: To ask the Chancellor of the Exchequer when he received a reply to his letters of 12 May and 14 June to the right hon. Member for Dunfermline, East (Mr. Brown). [32552]

Mr. Kenneth Clarke: I regret to say that I have received no reply from the hon. Member for Dunfermline, East (Mr. Brown) to my letters to him of 12 May and 14 June. I assume that he is still unable to decide on an inflation target and whether or not he agrees with my decisions on interest rates.

Mr. Thurnham: Does my right hon. and learned Friend agree that Labour cannot answer serious economic

questions because it does not have a serious economic policy—only classical exogenous waffle to camouflage the job-destroying minimum wage and social chapter?

Mr. Clarke: I agree that members of the Opposition Front Bench find themselves in a sad position. There cannot be a Member of the House of Commons who has not at some stage expressed an opinion on the movement in interest rates. The markets have since moved, there has been a wide range of financial comment and all the data—including the Bank of England's advice to the Government—are before us. The hon. Member for Dunfermline, East cannot even answer a letter because he cannot make up his mind whether or not he has an opinion.

Mr. Andrew Smith: As the Chancellor is so upset about replies to letters, will he now answer my letter to the Treasury of 23 June, which refuted fraudulent Conservative spending claims? While the right hon. and learned Gentleman is at it, will he account for his evident loss of control over the Prime Minister and his new spending commitment, now amounting to more than £11 billion? Answer that.

Mr. Clarke: At least the hon. Gentleman wrote only on 23 June. I shall certainly let him have a prompt reply based on the experience of having taken £45 billion out of my colleagues' spending plans already, so I must rebuff the hon. Gentleman's claims about spending. As to the repeated theme concerning my right hon. Friend the Prime Minister, I was present when he made his excellent speech confirming his leadership of the party. I was not startled by his remarks, and I checked the text to remind myself why.
My right hon. Friend said of capital gains tax and inheritance tax:
My aim is to see these taxes reduced and if possible abolished altogether. I make no promises about when we can do it … no certainty that we can do it in the near future. But it should be set down now as a clear objective of any Government that I lead that I wish to see an end to inheritance tax and capital gains tax.
That is, if anything, slightly more cautious in tone than my agreement with the remarks made by my right hon. Friend the Prime Minister yesterday. We have set that long-term objective because we believe in the benefits of low taxation and that one generation should be able to hand on the wealth that it has earned to the next generation.
We believe also that capital gains tax should be re-examined because it can impose damaging effects on investment, particularly in unquoted companies. The Opposition, because they have no policy on anything and cannot answer straight questions on any economic policy, keep inventing fraudulent misquotations to try to make an issue of something else.

Mr. David Shaw: My right hon. and learned Friend surely is aware that a considerable amount of taxpayers' money goes to the Opposition in Short money, so that they can reply to letters from him asking about the Opposition's policies. Should we not examine the value that taxpayers receive for that money? Should we not be getting answers from the Opposition about their policies, so that taxpayers can see and understand them?

Mr. Clarke: I share my hon. Friend's feeling. I can only assume that the Short money all goes to the hon.


Member for Hartlepool (Mr. Mandelson) and the many public relations assistants that he must employ. As we all know, the hon. Member for Hartlepool plays the role in the Opposition that they mythically believe my right hon. Friend the First Secretary will be playing in the Government.

Mr. Gordon Brown: Will the Chancellor now answer the question that he did not answer yesterday? Does he support the principle of abolishing inheritance tax and capital gains tax? Will he confirm that that would cost at least £3 billion? Will he further confirm that the main beneficiaries would be 5,000 people, who would get half the gains from abolishing the two taxes? Will he now tell us who is in charge of the Treasury and of tax policy? Where is the Budget being written—in No. 11 Downing street, No. 10 Downing street or No. 10a Downing street?

Mr. Clarke: If the hon. Gentleman is having difficulty with his correspondence, he could have given me a reply just now when he was on his feet. Let me read again what the Prime Minister said:
My aim is to see those taxes reduced and if possible abolished altogether. I make no promises about when we can do it.
I said:
The Prime Minister set out these objectives as a long-term aim for the Conservative party".
I do not see the faintest difference. I remain in charge of economic and taxation policy, with the full support of the Prime Minister. The Government's aim is to achieve low taxation, as and when we can afford it and when it is in the interests of the economy.
The hon. Gentleman seems to think that we have a lot of people in charge of economic policy, but it is clear that absolutely no one in his party is in charge of it.

Mr. Salmond: Is the Chancellor aware of just how desultory and pathetic many of us find the exchanges between him and his shadow? Why cannot we have an economic debate conducted on real economic aggregates, such as employment, productivity and output? Surely that would be better than debates that seem to turn on whether the hon. Member for Dunfermline, East (Mr. Brown) is aware that there needs to be a half-point correction in interest rates so as to meet one of the Chancellor's many inflation targets.

Mr. Clarke: We had a debate on the economy in the House yesterday. Unfortunately the hon. Gentleman seemed to have a prior and pressing engagement elsewhere and was not able to join us. Hardly any nationalists from Scotland or Wales were present from beginning to end, as far as I can recall.
I prefer to talk about the 3 per cent. growth that we are going to achieve this year; about keeping inflation to 2.5 per cent. or less at the end of this Parliament; about the 660,000 people who have come of the unemployment register; about the need to get unemployment down further; and about the need to give this country a modern, industrial economy that will sustain growth throughout the rest of this decade. It is the pathetic nature of the official Opposition and the absence, when we debate the economy, of the Scottish nationalists, that reduce us to the kind of drivel that we have just heard.

Gilts Registration

Mr. French: To ask the Chancellor of the Exchequer what representations he has received about the registration of gilts. [32553]

Mrs. Angela Knight: Representations about the registration of gilts are rarely received.

Mr. French: I am grateful to my hon. Friend for that answer. Is she aware of the extent to which stock held on central gilts office accounts is exposed to the risk of misregistration and misallocation, whether intentional or otherwise? As the Pensions Bill contains no provisions relating to gilts custody, will she have discussions with the Bank of England to ensure that this real risk is covered?

Mrs. Knight: My hon. Friend asks a specific and detailed question. I assure him that the Pensions Bill regulates fund managers. As my hon. Friend rightly points out, they are involved in the central gilts office; but thousands of gilts are traded each week in that office and so far not even one alleged case of a breach of security has been reported.

Mr. Stevenson: In view of the Chancellor's recent announcement that he intends to limit the scope of taxation on gilts, will the Minister assure us that the Government have no intention of extending, and will not extend, the rate of VAT in a similar spirit? Or does the Minister agree with the Chancellor that far too many goods are still exempt from VAT?

Mrs. Knight: The hon. Gentleman will have to wait until the Budget.

Mr. Clifton-Brown: I congratulate my hon. Friend on her well deserved promotion. She is one of the 1992 intake and, on behalf of that intake, I may say that we are delighted to see her.
Small, prudent savers will certainly welcome the written parliamentary answer on the taxation of gilts given to my hon. Friend the hon. Member for Southport (Mr. Banks), stating that 99 per cent. of small savers will be exempt and that they will have until April 1996 to get their investments in order. That is extremely welcome news to small savers.

Mrs. Knight: I am grateful to my hon. Friend, who makes a good point. We consulted large and small holders of gilts. I believe that the announcement that has been made satisfies everybody.

Privatisation

Mr. Mullin: To ask the Chancellor of the Exchequer what plans he has for further privatisation; and if he will make a statement. [32554]

The Financial Secretary to the Treasury (Mr. Michael Jack): The Government continue to look for opportunities to transfer public sector businesses to the private sector. For example, we are proceeding with plans


to transfer the operation of British Rail to the private sector and to privatise the major part of the nuclear power generating industry.

Mr. Mullin: It would be wholly irresponsible, would it not, to use the proceeds of the sale of public assets to fund tax cuts for the purpose of purchasing the result of the next general election?

Mr. Jack: I am rather surprised that the hon. Gentleman, who normally deals with these matters in considerable detail, poses a question in that way, because he will know that, since the process of privatisation was begun, what used to cost this country £50 million a week now is now generating income to the Treasury of £55 million a week in terms of receipts from taxes on profits. That is the benefit of privatisation that we support.

Mr. Tim Smith: I congratulate my hon. Friend on his appointment and welcome him to his first Question Time. Does he agree that privatisation has been hugely successful both for taxpayers and for customers, that we should continue to privatise Government services wherever we can, and that we should export the successes of privatisation wherever we can?

Mr. Jack: I am most grateful to my hon. Friend for his kind words. We debated this matter yesterday and have already had an exchange on it. He is right to draw attention to the tremendous opportunity and contribution that the private sector has given to the Government—£455 million of savings have been posted so far. He is also right to attest to this country's great expertise in privatisation. It is good to see that Britain leads the world in that area.

Ms Primarolo: If the Chancellor is still in charge of economic policy, and not the resident of No. 10a or No. 10 Downing street, will the Financial Secretary tell us whether, in principle, he supports the taxing of income from executive share options and whether he will deal with the scandal of taxpayers who are being ripped off under these privatisation processes?

Mr. Jack: Rewards in this area are extremely important. The hon. Lady touches on a subject which as she knows full well, will be dealt with when Sir Richard Greenbury reports. [Interruption.] It is not a question of Sir Richard Greenbury or anybody else being in charge. My right hon. Friend the Prime Minister gave a clear indication that he wanted that area to be investigated. He was entirely supported by my right hon. and learned Friend the Chancellor, who has given a robust defence of who is in charge of economic policy. He is and the Government are: the Opposition are not.

Mr. Stephen: Further to my hon. Friend's reply to the hon. Member for Sunderland, South (Mr. Mullin), does my hon. Friend agree that all political parties are in the business of bribing the electorate? The difference is that Opposition Members do it by promising more and more public expenditure, whereas we do it by promising to leave more and more money in the pockets of the people. It will be for the people to make their choice at the next general election.

Mr. Jack: My hon. Friend touches on an interesting area. The only problem with his analysis, if I may take a point of difference with him, is that our economic policies, which are appealing to people, are based on

sound fundamentals. We have real numbers to show where we are going; how anybody could be bribed by a blank piece of paper from the Opposition I do not know.

Single European Currency

Mr. Tipping: To ask the Chancellor of the Exchequer what consideration he has given to the name for a single European currency. [32555]

The Paymaster General (Mr. David Heathcoat-Amory): There is no need for a decision now on the name of a possible future single currency.

Mr. Tipping: Does the Minister recall the Chancellor's recent comment that he was in favour of calling a new single European currency the crown or the shilling? Does that mean that he is now in favour of abolishing the pound? What discussions has he had with the right hon. Member for Wokingham (Mr. Redwood) on that over the past month or so?

Mr. Heathcoat-Amory: My right hon. and learned Friend participates in the technical discussions, but the hon. Gentleman should not be too worried either way about the name, as the important point is that we are not committed to stage 3 of monetary union—unlike the Labour party, which is committed to monetary union and a single currency while at the same time being committed to inflationary policies. That combination would be a recipe for ruin.

Mr. Brooke: In the centenary year of Wilde's greatest play, does the Paymaster General recall the advice of Miss Prism:
The chapter on the Fall of the Rupee you may omit. It is somewhat too sensational"?
Does he agree that a couple of years of silence on the single European currency would do nobody any harm and might well do the exchange rate some good?

Mr. Heathcoat-Amory: Yes, particularly on the name of a single currency, where no decision is required and no decision is imminent.

Mrs. Anne Campbell: Will the Minister ask the Chancellor of the Exchequer if he still agrees with the principle of European monetary union? If so, does he still agree with his remarks reported in The Times in February that the Conservative party has run out of ways of making it clear that there are no divisions?

Mr. Heathcoat-Amory: The policy is absolutely clear and it has been repeated by my right hon. and learned Friend the Chancellor and by my right hon. Friend the Prime Minister both to the House and outside: we are not committed to stage 3 of monetary union. We achieved an opt-out during the Maastricht negotiations. A future Parliament and a future House of Commons will make that choice in the circumstances of the day.

Private Finance Initiative

Mr. Garnier: To ask the Chancellor of the Exchequer what contribution he expects the private finance initiative to make to the provision of capital for infrastructure projects. [32556]

Mr. Jack: My right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget


speech that contracts leading to £5 billion of capital investment are due to be signed in 1995 under the PFI. He announced a further £1 billion of projects in January.

Mr. Garnier: Will my hon. Friend confirm that the PFI is available across the national infrastructure and is available to every Department of State? Will he comment on the lamentable failure of the Opposition to come to grips with that excellent initiative?

Mr. Jack: My hon. and learned Friend precisely states the situation. The fact that we can post £5 billion-worth of new economic activity at a time when the Opposition are criticising us on investment shows the true effectiveness of our economic policy. I note that, with regard to private finance in the Prison Service, on the one hand the Opposition call for tougher measures on law and order and then announce that in principle they are against private money building new prisons.

Mr. Timms: The Minister will be aware that the Belgian high-speed rail link to the channel tunnel is being built and that the French high-speed rail network has been operating for a number of years, yet in Britain this week fundamental questions have been raised about whether our high-speed rail link to the channel tunnel can be funded. In those circumstances, does the Minister agree that the Government's priority should be investment in infrastructure before the abolition of capital gains tax and inheritance tax?

Mr. Jack: What is fundamental is that the high-speed channel rail link—a project valued at some £2.7 billion—is being actively competed for; the four original bidders are now down to the final two. Private sector companies want to make this investment and they will do so, to the benefit of our transport infrastructure.

Mr. Wilkinson: Does my hon. Friend agree that the crossrail project offers one of the best prospects for private finance and is of particular importance for the regeneration of the economy of London and the south-east? Will he and his colleagues in government do everything possible to facilitate it?

Mr. Jack: My hon. Friend is right to point out how private capital can further develop London's transport infrastructure. I add to his joy on that, because we also have PFI help for 100 extra trains on the Northern line. Again, that is an example of how much-needed public investment in infrastructure has been achieved under this remarkable initiative.

ECOFIN

Mr. Soley: To ask the Chancellor of the Exchequer when he next expects to attend an ECOFIN meeting; and what subjects are on the agenda. [32558]

Mr. Kenneth Clarke: I attended a European Council of Economic and Finance Ministers meeting on Monday 10 July at which a variety of subjects was discussed. My intention is to attend the next ECOFIN meeting on 18 September. As yet, no firm agenda for this meeting has been agreed.

Mr. Soley: Is it the Government's intention to keep the pound in the European currency fluctuation band even if ECOFIN decides to narrow that band in the next two years?

Mr. Clarke: We have no intention of re-entering the exchange rate mechanism, at least for the duration of this Parliament. [Interruption.]

Madam Speaker: Order. This is wasting time. I call Mr. Cash.

Mr. Cash: Will my right hon. and learned Friend confirm that, at the most recent ECOFIN meeting, there was absolutely no question of the United Kingdom submitting to any kind of threats from other member states with regard to the possibility of the creation of a "hard core" in Europe? That would result in their imposing tariff barriers, penalties or sanctions on us, or trying to push us into a second-rate, disastrous exchange rate mechanism.

Mr. Clarke: I can reassure my hon. Friend on all those points. The reports of ECOFIN meetings that I read when I return from them rarely bear much resemblance to what took place. I answer written questions in the House, however, and I suggest that my hon. Friend read those answers if he wants to find out what actually went on. It was reported that, at the last meeting, the French were threatening the imposition of all kinds of penalties on those who were not in the hard core, but I have yet to meet a Frenchman who has ever heard of the suggestion.

Income Tax (Self-assessment)

Mr. Patrick Thompson: To ask the Chancellor of the Exchequer if he will make a statement on progress on the introduction of self-assessment of income tax liability. [32561]

Mr. Jack: Work is proceeding to the planned timetable for the introduction of self-assessment for personal tax, and the issue of the new tax returns in April 1997.

Mr. Thompson: I thank my hon. Friend and his colleagues for the briefing sessions on self-assessment that they have been giving Members of Parliament. Can he assure businesses and, indeed, individuals that the introduction of self-assessment will not mean added burdens, extra form filling and the like? There are still some worries on that score.

Mr. Jack: One of the key elements of self-assessment is simplification. I assure my hon. Friend that, just as we have sought to inform Members of Parliament, there will be a major information campaign throughout the coming 12 months to inform all sectors of business and all private individuals about the changes.

Oral Answers to Questions — PRIME MINISTER

Engagements

Sir Peter Tapsell: To ask the Prime Minister if he will list his official engagements for Thursday 13 July. [32458]

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Sir Peter Tapsell: May I urge, yet again, the withdrawal of British troops from Bosnia—particularly


because Bismarck's wise advice, quoted yesterday by our right hon. Friend the Member for Shropshire, North (Mr. Biffen), was ignored by his successors, so that eventually the road to Sarajevo was paved with the bones of Pomeranian grenadiers? We do not want that road to be paved with the bones of our young men.

The Prime Minister: I know that my hon. Friend has held a consistent view about the difficulties that we face in Bosnia, and that some others share that view. There can be no certainty about what will happen in the present circumstances, but I hope that I can tell my hon. Friend why I believe that it would be unwise for us to decide to take that action now.
I believe that, if UNPROFOR withdrew, a number of things would be at risk. We would certainly put at risk the peace that remains in central Bosnia, not least because of the presence of British troops; and we might put at risk the hundreds of thousands of lives that have been saved as a result of the presence of United Nations troops.
Let me touch on the wider point on which my hon. Friend also touched. One of the primary reasons why I felt it right to send British troops to the area in the first place, and why I would be reluctant to remove them unless it became imperative to do so, is the danger of a wider Balkan war. That risk exists, and it is for that reason that I felt it right to ask British troops to go to the area in a peacekeeping capacity and try to ensure that such a war did not occur.
I concede to my hon. Friend that the situation is serious. As I have told the House before, circumstances could arise in which it would be impossible for United Nations troops to remain; but until and unless those circumstances arise, I believe that it is right for them to do so, and to contribute to peacekeeping in the way in which they have so far.

Mr. Blair: Will the Prime Minister confirm that his leadership election pledge to abolish inheritance tax and capital gains tax would amount to £3 billion a year, and that almost half that £3 billion would go to just 5,000 people?

The Prime Minister: I understand that the hon. Member for Dunfermline, East (Mr. Brown) has been dancing around with all sorts of fraudulent and distorted quotations. I will make it quite clear to the right hon. Gentleman—as I have done, both publicly and privately, for some time—that when it is appropriate and we can afford to do so—[Interruption.] That is what I said. When it is appropriate and we can afford to do so, I wish to abolish both capital gains tax and inheritance tax. I repeat the point for the right hon. Gentleman: I have made that clear and it must wait for when resources allow. I make no apology for that. The distortion of capital gains tax will need to be tackled. Unlike the Labour party, I believe in trying to pass wealth down between generations, whereas it squirms and wriggles whenever we talk of any tax reduction.

Mr. Blair: I might remind the right hon. Gentleman that, during the leadership election, he said that he wanted to do that at the earliest opportunity. I do not know whether No. 11 Downing street or No. 10a has now changed the line, but, in any event, would it not be the most mistaken sense of priority to cut inheritance tax or capital gains tax when we know today that, as a result of Government cuts in spending, we are short of teachers and that classroom sizes are rising? Should not the interests of

the many in a decent education for their children come before the Tory obsession with the interests of a privileged few?

The Prime Minister: I am astonished that the right hon. Gentleman thinks that home owners right across the country, increasingly hit by inheritance tax, are a privileged few. They will be interested to hear that they are a privileged few. It is true that they were a privileged few when the Labour Government were in power and many former council home owners, now home owners, would have remained without that privilege had we been left with a Labour Government. The reality is that the people of this country would like to see changes in those taxes and, when it is prudent to do so, we will change them.

Mr. Blair: As a matter of fact, the vast majority of people do not pay inheritance tax or capital gains tax and the right hon. Gentleman did not dispute that more than half the benefit would go to 5,000 people. As for tax, let me remind him that he pledged to cut tax at the last election, that he increased the standard rate of income tax by 7p and that only one tax cut has been introduced since the 1992 election: a cut of VAT on fuel by Opposition Members.

The Prime Minister: The right hon. Gentleman knows very well that he and his colleagues have voted against every tax reduction that we have introduced throughout most of the past 16 years. Even at the suggestion of tax cuts, one sees the instinctive reaction of Opposition Members. They hate the thought of leaving money in people's pockets. They would rather have it themselves to spend for themselves. I have made it clear that it is my ambition to abolish inheritance tax and capital gains tax as and when we can do it. My right hon. and learned Friend the Chancellor of the Exchequer has made that clear, too. It remains our ambition, and we will pursue it.

Mr. Tracey: What message would my right hon. Friend send to the people of Wales, whose Labour Members of Parliament boycotted the House and Welsh Question Time at the beginning of this week? Would he suggest a forfeit for them, because surely their behaviour jeopardises the future representation of the Principality in the House?

The Prime Minister: There is no doubt that those hon. Members' behaviour was juvenile—sufficiently juvenile, no doubt, to qualify for nursery vouchers as soon as we fully introduce the scheme. When the Labour party thinks up ill-judged stunts such as that, it would do well to remember that two of its past five or so leaders have been Englishmen sitting in Welsh seats.

Mr. Llwyd: To ask the Prime Minister if he will list his official engagements for Thursday 13 July. [32459]

The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.

Mr. Llwyd: Following the rather dramatic departure of the Prime Minister's very good friend, the right hon. Member for Wokingham (Mr. Redwood), the right hon. Gentleman has appointed someone to the Welsh Office who, nominally at least, is from the same planet as the rest of us, but in so doing he has appointed the fourth successive Member of Parliament to that office who has no interest at all in Welsh affairs. Has the Prime Minister


not shown that he has no confidence in Welsh Conservative Members of Parliament and is it not really a pathetic reflection on them?

The Prime Minister: I am sorry that the hon. Gentleman chose his question before listening to what might have been asked earlier. He might bear in mind the fact that we are one United Kingdom. It is perfectly proper for a previous leader of the Labour party to be a Welsh Member of Parliament seeking to be Prime Minister of the United Kingdom. It is perfectly proper for two English Members to sit in Welsh seats, one of whom became Prime Minister and one of whom tried to do so. It is only the Welsh nationalists who wish to wrap themselves up in a little country and damage that country and its prospects within the United Kingdom.

Mr. Charles Wardle: If the new directive to abolish internal frontiers is the Commission's response to the action it faces in the European Court for not having dismantled the frontiers under existing treaty law, what credible defence is there for Britain in talk of a veto, or the worthless Luxembourg declaration? If my right hon. Friend means to protect our sovereign borders against unchecked immigration, will he get the treaty amended? If not, he will face the wrath of not just the Euro-sceptics in the House but virtually the entire British electorate.

The Prime Minister: The European Commission has produced three proposals. It made it clear that the proposals must be taken together and must be agreed unanimously. Unless those proposals are agreed, there is no matter upon which the European Court can adjudicate. I can tell my hon. Friend that there must be unanimity and that that will not happen. The United Kingdom will veto the proposals.

Mr. Battle: To ask the Prime Minister if he will list his official engagements for Thursday 13 July. [32460]

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Mr. Battle: Following the leadership election and his new-found determination to stamp his views and authority on the Cabinet, will the Prime Minister now tell us whether he agrees with the proposals of the Nolan committee on sleaze that amounts earned from consultancies by Members of Parliament should be openly declared?

The Prime Minister: I have made it perfectly clear to the House on a number of occasions since the outset that I favour greater transparency. I have made it equally clear that we will wait until we have the Select Committee report before I say any more.

Mr. Sumberg: Will my right hon. Friend join me in condemning tomorrow's rail strike, which will bring massive disruption to the country? Is it not revealing that, when it comes to standing up for the consumer and criticising the trade unions, new Labour remains totally silent?

The Prime Minister: That follows neatly from the previous question. There has been absolute and total silence from the Opposition Front Bench when it comes to looking after the interests of passengers. We have not heard a word about the RMT or ASLEF or about

the inconvenience to passengers. All I can say is that it is a good job that one does not go to Australia by train.

Ms Corston: To ask the Prime Minister if he will list his official engagements for Thursday 13 July. [32461]

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Ms Corston: In the light of today's report from school governors that teachers are being sacked and that class sizes are increasing, despite the Prime Minister's repeated assurances that neither of those things would happen, will the right hon. Gentleman now apologise to the British people?

The Prime Minister: The hon. Lady might well acknowledge the increase in resources to education year upon year: it is 50 per cent. up on the level that we inherited some time ago. She might also acknowledge the improved examination performance, improved teaching, improved choice and the improvement in the number of our youngsters going to university. All those things have magically waved by the hon. Lady without her apparently noticing them.

Lady Olga Maitland: Has my right hon. Friend seen the report in today's newspapers, including The Daily Telegraph, that 100 terrorists could be released from gaol early? Does he agree that that is totally untrue and that there are no plans to release terrorists early into the community until they have served their full and rightful sentences?

The Prime Minister: The position is as it has always been and as the House knows. There is no question of an amnesty for prisoners in Northern Ireland. There are no political prisoners anywhere in the United Kingdom. We keep remission rates under review. That has been the case and it will remain the case for some time. Remission rates were introduced some time ago and, as I have said, we keep them constantly under review. I do not think that the time is yet right for a change.

Madam Speaker: We now come to Question 5.

Ms Church: Question 6—no, Question 5, Madam Speaker.

Madam Speaker: Yes, Question 5.

Ms Church: To ask the Prime Minister if he will list his official engagements for Thursday 13 July. [32462]

The Prime Minister: Whichever question number it may be, the answer is the same.

Ms Church: Does the Prime Minister agree that external regulation of the insurance market, as desired by both Lloyd's and the Select Committee, would increase the global credibility of the London market? Will he amend the Lloyd's Act 1982 to bring that about?

The Prime Minister: I do not think that I necessarily accept the hon. Lady's premise. It is clear that, because of the difficulties at Lloyd's over the past couple of years, we need to look carefully at the methods of regulation. However, until we have examined them properly, I am not inclined to make any suggestion of a changed regime.

Mr. Rowe: Has my right hon. Friend noticed that the moment the opinion polls give even the illusion that there


might conceivably be a Labour Government some time in the future, the trade unions queue up to threaten the customer and the patient with industrial action? Does not it frighten him as much at it frightens me that new Labour will be as much a pawn in the hands of the trade unions as old Labour used to be?

The Prime Minister: There is no doubt about the pre-emptive obeisance shown by the Labour party on the minimum wage, the social contract and a range of other issues. Of course, we do not have to fight with the trade union movement if we offer it exactly what it wants, when it wants it—and even before it has asked for it.

Defence Equipment

The Secretary of State for Defence (Mr. Michael Portillo): With permission, Madam Speaker, I should like to make an announcement of two important defence equipment programmes.
In this year's defence White Paper, the Government reaffirmed their commitment to maintaining world-class armed forces to defend our vital national interests in a disordered and turbulent world. To that end, we are continuing our programme of investment in forces and equipment that provide us with enhanced flexibility, combat power and mobility.
The Government have been considering the bids from industry to supply an attack helicopter for the Army to replace the Lynx anti-tank helicopter around the end of this decade. Six companies responded to our invitation to tender—Agusta, offering the A129; Boeing-Sikorsky, with the Comanche; Atlas, with the Rooivalk; Westland helicopters, with a version of the McDonnell Douglas Apache; British Aerospace, with the Eurocopter Tiger; and GEC-Marconi Avionics with the Bell Cobra Venom. All the bids were of high quality, offering capable helicopters. I am grateful for the assistance that each of those companies has offered to us in this competition.
The Ministry of Defence has conducted a competition of the utmost rigour and objectivity, assessing the military capability and cost-effectiveness of each bid in the varied war-fighting scenarios where we might need it. The assessment criteria included operational effectiveness, crew safety, through life costs, technical risk and industrial implications.
I can announce that, subject to the negotiation of satisfactory contract terms, we have decided to buy 67 Westland Apache helicopters with Rolls-Royce engines. They will operate, as required, in support of the Army's two armoured divisions, 24 Airmobile Brigade and the Royal Marines.
This order, with a value of around £2.5 billion, will be warmly welcomed by the armed forces. Apache has demonstrated its value in service with the United States army, and the version that we shall buy is equipped with the new Longbow radar, which will significantly enhance its effectiveness. It will provide the British Army with a world-class capability, a generation ahead of the Lynx helicopter, offering us the right combination of mobility, rapid deployment, reach and firepower. I regard it as vital that those who risk their lives for this country be provided with the helicopter that we believe can destroy the highest number of enemy targets with the least loss of life among our crews.
This decision will bring many jobs in British industry. Westland, Britain's only maker of helicopters, will assemble Apache and manufacture its transmission at Yeovil. Around 180 other UK companies will participate in the programme, including Rolls-Royce, which at its plant in Bristol will manufacture the RTM 322 engine. That modern engine will provide long-term growth potential and commonality with the engines in the Navy's Merlin and the RAF's EH101 helicopter fleets.
There will be significant work for Shorts of Belfast on the Apache's Hellfire anti-armour missile. We are ordering a helicopter built by Westland, powered by Rolls-Royce, and equipped with missiles supplied by Shorts.
In total, British industry will do at least 50 per cent. of the work on the Apaches that we buy. Moreover, Westland's US subcontractors have undertaken to provide additional defence work for British industry, including work on Apaches for supply to the US army, to the full value of the overseas content of the contract. That means that orders worth £2.5 billion will be placed with British companies, of which half will be for work on the British Army helicopter.
We believe that in total the order will sustain some 3,000 jobs a year in our defence industry. In addition, we have negotiated rights for the maintenance and repair of Apache in the UK and will be offering that service to all other Apache users in Europe, with further significant benefits to UK industry.
I have a second announcement. My predecessor, now the Foreign Secretary, announced last year that the "Front Line First" reforms would allow us to proceed with a programme of investment necessary to maintain operational effectiveness within a reduced defence budget. He said that the Government were examining the case for acquiring conventionally armed Tomahawk land attack missiles. Feasibility studies with the US Government and with industry have confirmed that we can operate Tomahawk from Royal Navy nuclear-powered submarines.
Tomahawk's very long range and great accuracy will enable the UK to threaten limited action against selected targets as a means of persuading an aggressor to desist from hostile activity. In today's strategic conditions, it is important to have that capability to carry out precision attacks, minimising the risk to our own forces, as well as to civilians.
We believe that that system will provide a significant addition to our military capability. Today we have formally applied to the US Government to acquire Tomahawk. Subject to the necessary agreements, our aim would be for the system to enter service with the Royal Navy by 1998. Although we are buying an American weapon, we expect over 30 per cent. of the value of the work to be done in Britain.
The Government are committed to ensuring that the British armed forces receive the best possible equipment available. With these announcements they can continue, in the next century, to have the flexibility, mobility and firepower to engage in a range of operations, from war fighting to peacekeeping, with the skill and professionalism that all of us in the House admire.

Dr. David Clark: May I welcome the Secretary of State to his new Department? He comes with quite a reputation—a factor which I feel has been reflected in today's announcement.
The Opposition welcome this afternoon's announcement that the Army has finally got the attack helicopter that it wanted, although I would suggest that it will be somewhat disappointed that it is getting a much smaller number than it originally anticipated.
We share the relief of the workers at Westland, Rolls-Royce and Shorts and their subcontractors that they have been successful, and we commiserate with the losers. However, a number of questions are raised by the Secretary of State's announcement, especially as it affects our industrial base.
We note that the Secretary of State has brought with him the rigours of Treasury thinking and that the Army is getting fewer helicopters than it and the Ministry of Defence considered the minimum for our effective defence. He will recall that the tender specification was for 91 helicopters, and in the Army debate as recently as 23 February, the then Minister of State for Defence Procurement spoke of "approximately 100". Sixty-seven is not approximately 100. It is nowhere near 100. What has changed? If 100 was necessary for the effective defence of Britain three years ago, why can we settle for 67 now? I press the Secretary of State to say what has changed, or is this further cut another example of his Treasury thinking?
May I also ask the Secretary of State whether any of those helicopters are being adapted to operate from ships? As the Americans would say, are they being "marinised"? Given the possible future scenarios for theatre operations by the Army, that would be a sensible option. Has the Secretary of State taken that into account?
Will the Secretary of State also say a word about the long-range TRIGAT missile system, which would have been part of the Euro Tiger deal? Will he confirm that the taxpayer has already invested £210 million in that venture and that, contractually, British Aerospace will have to pull out of the collaborative scheme now that Tiger is not being ordered by the British forces? What implications do his decisions have for British Aerospace factories at Lostock and Stevenage? Does he anticipate any redundancies?
As the Secretary of State said, all the helicopters met the specifications and I therefore presume that wider industrial and political implications were considered. The Secretary of State's well-known Euro-scepticism clearly meant that the European collaborative Tiger was not in the running. But what assessment has been made of the effect of that order on future European collaboration? Has he examined the implications that buying American in this instance will have for other collaborative ventures? What assessment has he made of the employment prospects for the unsuccessful bidders? Are we likely to see further job losses among our most skilled workers? Will we see further factory closures and a restructuring of the ownership of the British defence industry?
The Secretary of State mentioned offset. What specific guarantees has he obtained? As he knows from his previous experience, there is considerable evidence that, more often than not, those offsets are not delivered, especially in the high-tech field.
We accept that Tomahawk missiles proved to be an incredibly accurate and effective weapon in the Gulf war and that they will enhance our forces' capabilities, but we are disappointed to note that only 30 per cent. of British work is involved and there is no mention of offset. Will the Secretary of State say a little more about that aspect and assure the House that it is not envisaged that those Tomahawk missiles will carry nuclear warheads?
We hope that today's decision will prove to be wise. We hope that, by turning his back on European collaborative ventures, the Secretary of State has not jeopardised further other European collaboration. If we are to retain the skills of our workers and the presence of

a defence industry in Britain, not only must we keep pressing for orders in the United States, but we need to work much more with our European partners.

Mr. Portillo: I thank the hon. Member for South Shields (Dr. Clark) for his welcome to me and his welcome, at least in his first sentence or two, of the order and the provision of these important new capabilities for our armed services.
I thought it a bit rich that I was being criticised for announcing a cut. I have announced an order of £2.5 billion for the attack helicopter and made a further important announcement in respect of Tomahawk. I thought it especially ironic and paradoxical that the accusation of a cut in defence spending should come from a party that, at its last conference, was pledged to reduce our defence spending by £6 billion. It makes one wonder how many helicopters could be bought in such a situation.
The hon. Gentleman wants to know why there are 67 helicopters. We are buying a helicopter with an enhanced radar—the Longbow radar. We have subjected it to the most intense scrutiny and we are convinced that it can do the job that we need it to do in those numbers because it has a very good survivability rate. That is one of the main features of the aircraft and it also means that it will save lives among British forces.
It is true that about £200 million has been invested in the long-range third-generation anti-tank guided weapons system, but I do not believe that decisions for the future can be taken on the basis of sunk costs of the past. We must make the decision about the best equipment for our armed forces for the future. We are not considering using it on ships. It will be able to operate with the Marines, but it is basically a land attack helicopter and tanks will be among its most important targets.
I cannot anticipate the consequences at British Aerospace and GEC. They competed very well. There will be many other opportunities for defence orders and I wish them well for the future. What I can say with precision is that today's announcement creates 3,000 jobs in British industry.
On European collaboration, the hon. Gentleman reached the zenith of his absurdity—as if my ideas about Europe, whatever they might be, would have influenced a decision of that magnitude, and during the past week.
Recently, the Dutch decided to buy the Apache. I assume that the hon. Gentleman will not rise in wrath in his place, point the accusing finger at the Government of the Netherlands and accuse them of Euro-scepticism. We have more collaboration with France than with any other single country on defence matters. We continue to have about 30 joint projects with Europe, and I have written to my colleagues in Europe—in France and Germany—assuring them of on-going collaboration in other projects.
We have a guarantee that 50 per cent. of the helicopter will be British work, and we have a promise of offset agreements taking us up to the full 100 per cent.
On the Tomahawk, I believe that the hon. Gentleman will recognise that there is no British or European equivalent that can be bought. In the circumstances, I think that to get 30 per cent. of the work in Britain is a considerable achievement. There will be many opportunities for future collaboration with the United States, and I am pleased to confirm that that is a conventional missile; we have no intention whatever of nuclear-arming that missile.
I am disappointed that the hon. Gentleman did not rise to give a more cheery response to an order that means that our armed forces will be equipped with the very best. Our primary consideration in the House should be the way in which we can enable our troops, our men, our forces, to have the equipment in which they have the greatest confidence when we in the House are potentially asking them to put their lives at risk.

Mr. Michael Colvin: May I congratulate my right hon. Friend, not only on his appointment, but on making a statement that will certainly earn him cheers in Middle Wallop, where the Army Air Corps is based? It has lobbied hard for that aircraft.
Can my right hon. Friend confirm that the £200 million spent on long-range TRIGAT will not be wasted, because that weapon can be used in armoured vehicles to knock out tanks? Will he tell us what will happen to the Lynx helicopters at present used in an anti-tank role? Will they be converted to light support helicopters to replace the Wessex? Lastly, can he confirm that it will be the Army Air Corps that will fly that aircraft?

Mr. Portillo: On the last point, yes, this helicopter is for the Army to operate. It is, effectively, a flying tank and it seems best that it should be operated by the Army. I reiterate that we also see it being used by the Royal Marines. The Lynx helicopters will be converted to general purpose and reconnaissance use. My hon. Friend is right to say that the fact that the long-range TRIGAT is not being purchased by the Government for this order does not mean that the £200 million has been wasted. In turn, I congratulate my hon. Friend because he has just become Chairman of the Select Committee on Defence.

Mr. Menzies Campbell: I welcome the Secretary of State to his new post and I welcome, without qualification, his statement, especially the decision to order the Longbow version of the Apache helicopter. Does the right hon. Gentleman recognise two points of similarity between the two programmes? First, both the Apache and the Tomahawk cruise missiles proved their effectiveness during the Gulf war. Secondly, both bring to the United Kingdom additional flexibility, which is undoubtedly necessary during a time of static defence budgets.

Mr. Portillo: I am pleased to receive the hon. and learned Gentleman's welcome—I am not sure whether it is influenced by the position in Yeovil. The announcement will, indeed, be good news all round. The hon. and learned Gentleman is absolutely right to say that these weapons have recently proved their effectiveness. I made the point in my statement that we are in an era of limited defence budgets. Through the defence costs study, we have been able to find savings in the defence budget, and my predecessor made it clear that that gave us the opportunity to provide flexible, up-to-date equipment for our forces to make them battle-ready and to give them the firepower that they needed.

Dame Peggy Fenner: My right hon. Friend will understand that, although his announcement may be good news for Yeovil, it is not good news for Medway because we hoped very much that the GEC-Marconi Avionics Cobra Venom would win the battle. It is extremely unusual for the Treasury to spurn the lowest tender, so one must be impressed by the service chiefs who insisted that the Apache was their favourite option.
My right hon. Friend added that the Apache gives 3,000 extra jobs. As I understand it—different companies around the United Kingdom will be affected—the GEC-Marconi Avionics Cobra Venom would have given rather more jobs than that. What considerations meant that the lowest tender was not accepted? I am, of course, impressed by the support for the Apache in the west country, but I believe that it is not quite such a marvellous decision for my workers, who suffered the biggest loss from the peace dividend when they lost 7,000 jobs at Her Majesty's dockyard and naval base.

Mr. Portillo: Nothing could give me greater sorrow than to disappoint my hon. Friend as I have to today. It is, however, inevitable that in a competition in which there are three finalists, approximately two thirds of Members of Parliament may be disappointed by the decision, at least vis-a-vis their own constituencies. I hope none the less that my hon. Friend and others will be able to see the merits of the decision and the high quality of the equipment that we are buying.
The circumstances, conditions and criteria were as laid out in my statement. We were dealing with considerations such as the effectiveness of the aircraft, the cost-effectiveness of the decision, the industrial implications and the industrial risks. That combination of circumstances led to our choice. It would not be helpful at this stage to go into any greater detail about how one bid compared with another, not least because they were all good bids and I hope to see all the contenders doing well in world markets.

Mr. Frank Cook: May I compliment the Secretary of State on his good fortune in being able to announce to the House, so early in his new-found position, the acquisition of a piece of kit that has an attrition rate, proven in action, that is so low that it is mathematically incalculable? Will all 67 models that we are buying have the Longbow radar rather than the less effective system bought by the Netherlands? When can the military expect the first delivery? How long will the programme take and when will the contract be completed?

Mr. Portillo: I am most grateful to the hon. Gentleman for his warm words of welcome. On his last point, I am not prepared to say more than that we see an entry into service date of the end of the decade. As to his first point, all the helicopters that we are ordering will be equipped with the Longbow radar.

Sir Jim Spicer: My right hon. Friend has made a very auspicious start in his new office. His announcement today will be warmly welcomed by the many friends of Westland in the House. But it goes beyond that. The friends of Westland are thinking not just about that company, but about the other companies and subcontractors that will also benefit from the order.
Could my right hon. Friend go a little beyond his announcement and say whether it is a good platform from which Westland could take off and move into export orders on a scale that we have not seen previously, with an attack helicopter that will almost certainly dominate all the export orders from this country and from the United States in the next 15 or 20 years?

Mr. Portillo: I am most grateful to my hon. Friend. He is very generous in saying that I have made an auspicious


start, but it must be apparent to him and to the House that I have inherited a huge amount of work done by my predecessor.
I am very pleased for Westland. My right hon. Friend the Minister with responsibility for industry and energy visited Westland this morning and presumably he was extremely upset that he was unable to give any hint about the good news. I hope that export opportunities will be created. There is obviously a huge advantage in being linked with a very successful United States programme that already has a very large order book.

Mr. Paddy Ashdown: I am very grateful to the right hon. Gentleman. As the hon. Member for Dorset, West (Sir J. Spicer) said, it is his first substantive decision in his new post. If the rest of the decisions that he takes in that post show an equivalent wisdom, I am sure that the nation's defences will have nothing to worry about.
The right hon. Gentleman will understand that my constituents warmly welcome his announcement and, as the hon. Member for Dorset, West said, so will many others across Britain, because the built-in content of the helicopters will provide a boost to British industry across the spectrum. Perhaps one of the most significant features of the decision is the fact that, during a time when everyone recognises that the world helicopter market will change substantially, it places Westland and British industry in a very good position to be able to take advantage of that period of change from a position of strength. That is a considerable testimony to the strength and the skill of Westland and its work force. As I am sure the right hon. Gentleman will agree, it also puts Westland in a very good position in the long term.

Mr. Portillo: I thank the right hon. Gentleman very warmly. I quiver under the gusts of his praise. I am not sure that I aspire to be always so popular with him, but I am very pleased to be so today.
Westland is well placed. If the right hon. Gentleman will be so generous as to share the day with Rolls-Royce, I think that the larger Rolls-Royce engines offer an opportunity for expansion and development of the model over time. That engine has greater flexibility to take us into the future.

Mr. James Couchman: My right hon. Friend will understand that, like my hon. Friend the Member for Medway (Dame P. Fenner), I am disappointed by the result of the competition. GEC has produced a leading-edge technology avionics cockpit. Has my right hon. Friend investigated the possibility of persuading Westland that GEC might make a contribution to the order? Can he confirm whether the fact that we are ordering 67 rather than 91 helicopters is a measure of how much more expensive the Apache was compared with the other two contenders?

Mr. Portillo: There is always great disappointment among those who are not successful in a bid, but I do not think that it benefits anyone to start knocking one model or another. We established a series of criteria and we judged the helicopters on that basis. One criterion was cost-effectiveness. We are able to do the job with the 67 Apaches, as I announced to the House today. I do not want to engage in any sort of banter about the prices of

the different helicopters or their performance capabilities, other than to say that it was a fair and objective competition and that there has been a winner.
We have been able to negotiate a 50 per cent. UK content in this helicopter deal. I do not at the moment envisage other opportunities, but of course I would be very happy indeed if different British companies were able to collaborate and if there were any way of increasing, in this or in future orders, the quantity of UK content.

Rev. Martin Smyth: I welcome the Secretary of State's new appointment. Some of us have been concerned about a fair bit of what we called cowboy advertising, so we are delighted that the Apache has been selected. The decision encourages industry all over. Specifically, on behalf of the people not only in Belfast but in Northern Ireland, I welcome the fact that Shorts will have a part to play. Does the Minister agree that there is also international co-operation, since Bombardier in Canada, Thomsons in France and Shorts in Belfast are all joining the team?

Mr. Portillo: I am most grateful to the hon. Gentleman. His point is perfectly valid. Nowadays there is international collaboration in almost any defence contract one cares to mention. Certainly, it is very good news that Shorts will play such an important part in the production of the Hellfire missiles.

Sir Peter Emery: Does my right hon. Friend accept the unmitigated praise of people in the west country, not only because of our constituents who will work on the contract, but because it meets the Army's demand? Will he answer two questions? Is it a fixed-price contract, or will there be any escalation of cost in later deliveries above that announced? Further to other questions, will he ensure co-operation between his Department, Westland and the Department of Trade and Industry, to do everything to maximise the export potential of this aircraft? It seems that, as long as such co-operation can be brought about, there is a very good chance of obtaining overseas orders that we have never achieved before.

Mr. Portillo: I thank my right hon. Friend. Certainly, on his last point, I give him an absolute reassurance that we shall collaborate to maximise export potential, as on all defence issues and products. We have not yet signed the contracts, of course, but it is my intention that they should be most rigorous. The propositions put forward during the bidding process should be confirmed and cemented in the contracts to be signed.

Mr. John Wilkinson (Ruislip-Northwood): May I also most warmly congratulate my right hon. Friend? He has fulfilled two crucial criteria: the operational and the industrial. On the operational side, has he not bought the aeroplane that best met the Army's requirements on payload, range, survivability and all-weather operation? In the industrial context, will he not greatly bolster the long-term future of GKN Westland, in as much as the last aeroplane, the EH101, was an Italian-British collaboration, but the Apache balances that co-operation with an American dimension—the McDonnell Douglas—and furthermore a French dimension, since a significant part of the power plant, the RTM 322, is built at Pau in the south of France?

Mr. Portillo: My hon. Friend has made some helpful additional points. He is absolutely right to say that the Rolls-Royce engine has a large French component. Perhaps I should have been quicker on my feet and mentioned that when I was replying to the hon. Member for South Shields (Dr. Clark). It is worth emphasising—I mentioned it in the statement—that Westland is this country's only helicopter maker and the deal is a very important buttress to its position. Certainly, my hon. Friend can be assured that the operational needs of the helicopter were very high in our minds indeed. As I have said before to the House, we are asking people to risk their lives and it is important that the equipment should be able to do the job and that they should have absolute confidence in it.

Sir John Cope: My right hon. Friend's decision was bound to please some and disappoint others. In my constituency, there will be great disappointment at British Aerospace on the dynamic side because the long-range TRIGAT was not chosen, but on the other hand there will be great pleasure at Rolls-Royce at the choice of engines. The Anglo-French engine is a very good example of European co-operation, which my right hon. Friend has backed. Will he do his best to try to ensure that the Dutch also choose that engine for their Apache helicopters?

Mr. Portillo: As to my right hon. Friend's last point, I am unsighted as to the stage that the Dutch have reached in making their decision, but it is certainly a good engine. We are buying it partly because we believe that it is suitable for the helicopter and partly because of the commonality that it offers. As to my right hon. Friend's dilemma, in that some of his constituents find themselves happy this evening and some disappointed, I wish him all good luck on his interviews with the local media tonight, but I am sure that he is up to the task.

Sir Kenneth Carlisle: Does my right hon. Friend accept that although we need a reliable attack helicopter, he has made a wrong and strange decision in respect of the engine? The T700 is fitted to existing Apaches and has proved reliable and cheaper. The Americans have it on their attack helicopter, and the Dutch have chosen it for their helicopter. With a fighting machine, one wants something that is proven, can protect lives and has a reliable history. That is certainly not true of the Rolls-Royce engine. The T700, which has as much UK content as the Rolls-Royce engine, is also wanted by the Army. Will my right hon. Friend confirm that the Army requested the T700 engine?

Mr. Portillo: I am sorry that my hon. Friend thinks that my decision is wrong and strange. I do not think that it is, although it may be disappointing from my hon. Friend's point of view. As many other hon. Members said, for them my decision is most welcome. My hon. Friend exaggerates when he says that the Rolls-Royce engine is not proven, because clearly it is. It is flying today and available on the EH 101 and the Merlin, but it has not yet been used on the Apache. It obviously offers the possibility on the Apache of future growth.
I hope that my hon. Friend, on reflection, will not feel that my decision is as he said. I make it perfectly clear to him that the decision taken today was more broadly based than consideration of the Army. The unit that we established in the Ministry of Defence to conduct the

competition took into account the full range of criteria mentioned in my statement, which went beyond some of the criteria of direct concern to the Army—such as the industrial implications. The decision was taken on the basis of the full range of criteria, including the choice of engine.

Several hon. Members: rose—

Madam Speaker: Order. I am anxious to call a number of Back Benchers who are still trying to catch my eye, but I cannot do so if there are long statements by Back Benchers and from the Dispatch Box. I hope that questions and answers will be brief.

Mr. Mark Robinson: I join hon. Members who welcome my right hon. Friend's decision, which is good news for Somerset and the west country, and a good confidence booster for Westland, which now has important work to do in export markets as well as in the domestic market. With reference to the comments of the hon. Member for South Shields (Dr. Clark), one always knows good news—

Madam Speaker: Order. The hon. Gentleman is the first to offend. I asked for questions, not statements. If the hon. Gentleman has a question, let me hear it. I am not prepared to listen to further statements by any other Back Benchers. Does the hon. Gentleman have a question?

Mr. Robinson: Yes, Madam Speaker. My question is, is not my right hon. Friend's statement good news in our export markets?

Mr. Portillo: It is good news. I am pleased that my hon. Friend is pleased, and I value his support.

Sir Jerry Wiggin: Will my right hon. Friend acknowledge that the absence of a purpose-built attack helicopter has been a serious deficiency in the British armed forces for some time and that one important aspect of his announcement is the rectifying of that problem? As I represent a constituency in which Westland is the largest employer, I need hardly say that I welcome my right hon. Friend's announcement, but will he condemn some of the irrelevant and misleading advertising that accompanied the contract and deplore it for the future?

Mr. Dennis Skinner: Is it in order for him to ask his own question?

Madam Speaker: Order. It is not in order to answer one's own questions.

Mr. Portillo: This is certainly an important capability, which our armed forces must have. Any deficiency that there has been is to be dealt with by my announcement today. I do not want to get into battles with any contractor over this matter. We have had a fair competition and a fair result.

Mr. Keith Mans: My right hon. Friend will not be surprised to learn that his decision will come as a shock and a disappointment to those of us from the north-west of England, as he has picked the wrong helicopter with the wrong engine. Can he confirm that all the Apaches will be equipped with Longbow? Will he tell the House the extra costs of fitting the Rolls-Royce engine to the


Apache, because it has not flown with it before? Will British companies be involved in the production of the long-range TRIGAT?

Mr. Portillo: Our commitment on the TRIGAT was to the end of the development phase: that remains the position. We cease our involvement at the end of that phase. I am sorry that my hon. Friend thinks this the wrong decision. I can confirm again that the helicopters will be equipped with Longbow. There is a small additional cost, which I am not at liberty to reveal, for the Rolls-Royce engine. Nevertheless, the decision passed the test of cost-effectiveness.

Sir Alan Haselhurst: On the basis that we must look to the future rather than the past, does my right hon. Friend agree that there must be some further consolidation of British resource in helicopter manufacture if we are to maintain the research and development capability that will enable us meaningfully to participate in future projects?

Mr. Portillo: Those matters go beyond my remit, but perhaps into the remit of the President of the Board of Trade. Certainly, a decision to award a £2.5 billion contract in itself has a fairly important formative effect on the industry.

Mr. Richard Tracey: My right hon. Friend will understand that, in a collaborative venture such as this, the likes of Westland, Rolls-Royce and Shorts will inevitably hit the spotlight; but he should know that the many other companies that he mentioned will also greatly welcome the success of the contract. I am thinking particularly of Racal Defence in Chessington, in my constituency, and in New Maiden. Will my right hon. Friend ensure by means of publicity that all the towns and cities affected by the contract in the form of new jobs are told the facts about it?

Mr. Portillo: My hon. Friend makes an important point. We estimate that 180 companies will benefit from this order, spread throughout the length and breadth of the United Kingdom. Some of them may even be in the constituencies of hon. Members who today have sounded disappointed.

Mr. Henry Bellingham: Is my right hon. Friend aware that this decision will go down particularly well in East Anglia, where the Airmobile Brigade is based and where it is shortly to have a new training facility at the former RAF Sculthorpe? As the brigade prepares to go to Bosnia, does he agree that today's decision will do a great deal for its morale?

Mr. Portillo: I thank my hon. Friend. I believe that the decision will indeed be good for morale. It is important

that our troops should know that they will get the equipment that they need and that the defence cost studies translate into better equipment for the future.

Mr. Edward Garnier: May I, as a recent visitor to 24 Airmobile Brigade in Colchester, confirm what my hon. Friend the Member for Norfolk, North-West (Mr. Bellingham) has just said—that the order just announced will be widely welcomed in military circles? May I also urge my right hon. Friend and the new Minister of State for Defence Procurement—I congratulate them both on their new appointments— whenever there is an opportunity to place large orders of this sort, to keep the British element in the components package well to the fore? If, for example, he is thinking of buying new heavy trailers for tanks, he should think hard about King Trailers in Market Harborough.

Mr. Portillo: I congratulate my hon. and learned Friend on getting in an early bid for a future announcement. I also echo what he said about 24 Airmobile Brigade. As this is my first opportunity to say so as Defence Secretary, I send that brigade my best wishes on its deployment.

Lady Olga Maitland: I welcome the fact that 3,000 new jobs are likely to result from the decision to buy the Apache helicopter, but will my right hon. Friend tell us how many jobs could have been created by the alternative bids?

Mr. Portillo: I am not prepared to get into that discussion this afternoon, if my hon. Friend will forgive me. The decision has been taken on a whole range of criteria, including the effectiveness of the aircraft, the cost-effectiveness of the aircraft, its performance in the battlefield and its implications for industry. It has been on the balance of those considerations that today's decision has been taken. I put it to my hon. Friend that if I started to unpick one element of that, I would have to start talking about the comparison across the range of how one helicopter performed against another. I am just not at liberty to do that.

Mr. Alan Howarth: As my right hon. Friend has shown today, his first concern must be to ensure that our armed forces are properly equipped and supported, to enable them to fulfil their necessary task of defending Britain and our interests. Will he as Secretary of State for Defence think anew and deeply about the economic, strategic and ethical distortions that arise from Britain's excessive dependence on arms manufacture and exports?

Mr. Portillo: I am bound to say to my hon. Friend that my view of the world is different from his. I do not believe it to be disproportionate. I believe that we are involved in equipping our own forces, and in the process we very often produce products of great use to other countries, and other countries have the right to defend themselves, as well as the United Kingdom.

Business of the House

Mrs. Ann Taylor: Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The
business for next week will be as follows:
MONDAY 17 JULY—Proceedings on the Appropriation Bill.
Consideration of Lords amendments to the Licensing (Sunday Hours) Bill.
Consideration of any Lords amendments that may be received to the Child Support Bill.
Consideration of any Lords amendments to the Criminal Appeal Bill.
Motion on the Local Government Elections (Changes to the Franchise and Qualification of Members) Regulations.
Motions relating to the Housing Benefit (General) Amendment regulations and the Social Security (Income Support and Claims and Payments) Amendment Regulations.
Motion on Parliamentary Pensions.
TUESDAY 18 JULY—Motion on the Special Grant Report (No. 15) (Metropolitan Railway Grant 1995–96).
Motions on the Fishing Vessels (Safety Improvements) (Grants) Scheme and the Fishing Vessel (Decommissioning) Scheme.
Motion on the Appropriation (No. 2) (Northern Ireland) Order.
The House will also wish to know that European Standing Committees will meet at 10.30 am on Tuesday 18 July.
[Tuesday 18 July:
European Standing Committee A— Relevant European Community document: 7514/95, Financial Assistance for the Environment. Relevant European Legislation Report: HC 70-xxi (1994–95).
European Standing Committee B— Relevant Community Document: 4966/95, Relations with Mexico. Relevant European Legislation Committee Report: HC 60-xi (1994–95)]
WEDNESDAY 19 JULY—Until 2.30 pm, there will be debates on the motion for the Adjournment of the House, the first of which will be the three-hour debate on matters to be considered before the forthcoming Adjournment.
Until about 7 o'clock, debate on the First Report of the Select Committee on Standards in Public Life.
Debate on sport on a motion for the Adjournment of the House.
The House may be asked to consider any Lords messages that may be received.
As the House may by now have realised, it is proposed that, subject to the progress of business, I intend that the House should rise for the summer Adjournment on Wednesday 19 July. The House may also like to know that I propose that the House should resume on Monday 16 October.
The provisional businesses for the first week back after the summer Adjournment will be as follows:
MONDAY 16 OCTOBER—There will be a debate on a Government motion to approve the Defence Estimates 1995 (CM 2800).
TUESDAY 17 OCTOBER—There will be a debate on a Government motion to approve the Defence Estimates 1995 (CM 2800).
WEDNESDAY 18 OCTOBER—Opposition Day (18th Allotted Day). There will be a debate on an Opposition motion. Subject to be announced.
European Standing Committee B will meet at 10.30 am on Wednesday 18 October.
[Wednesday 18 October:
European Standing Committee B— Relevant European Community document: COM (95) 73, Relations with Japan. Relevant European Legislation Committee Report: HC 70-xiv.]
THURSDAY 19 OCTOBER—Opposition Day (2nd Allotted Day—2nd Part). Until about 7 o'clock there will be a debate on an Opposition motion. Subject to be announced. Followed by a debate on motion for the Adjournment of the House.
FRIDAY 20 OCTOBER—Debate on a science and technology policy on a motion for the Adjournment of the House.

Mrs. Taylor: I thank the Leader of the House for his statement.
The right hon. Gentleman will be aware that the Select Committee on Procedure is to report on several issues next week. Will he ensure that there is a debate in Government time on one aspect of its report, the Jopling changes, which have been introduced on an experimental basis this year? When we have such a debate, is it the right hon. Gentleman's intention to provide an opportunity for the House to reach a decision about continuing the new procedures with which we have been experimenting this year?
Secondly, is any change to be made in the scope of Question Time to the Chancellor of the Duchy of Lancaster? Is it true that the Deputy Prime Minister and First Secretary of State will be answering questions to the Chancellor of the Duchy of Lancaster? If such changes are to go ahead, as we have heard indirectly, will the time allowed for such questions be lengthened in any way from the 20 minutes on a Monday, as I am sure that the Deputy Prime Minister will not be able to say all that he wishes in just 20 minutes?
Thirdly, as the Prime Minister and others have refused to take action on the abuses of executive pay and share options and have refused to comment on what action might be needed until the Greenbury report is published, and as we hear almost daily of ever higher salaries and ever bigger profits from share options, will the Leader of the House ensure that, when the Greenbury report is published, any statement by the Prime Minister or other Ministers is made to the House, so that Ministers can be directly questioned about the need for real action to curb those excesses, which are so offensive to our constituents?
Finally, should we not have a statement before the recess or even a debate in Government time on the implications for the comprehensive nuclear test ban treaty of the French nuclear testing in the Pacific—activities


which the Opposition consider to be completely unwarranted and which could jeopardise progress on the test ban treaty?

Mr. Newton: It will not surprise the hon. Lady to know that on the last point I have nothing to add to what my right hon. Friend the Prime Minister said on Tuesday.
With regard to executive pay, the hon. Lady will know that there is widespread expectation that the Greenbury committee will produce its report in the relatively near future, and I shall of course bear in mind the points that she has made.
With regard to how Question Time will be arranged, no definite decisions have yet been taken and I would envisage further discussion within the usual channels before any such decisions are taken.
Lastly, the hon. Lady is right to anticipate a report from the Procedure Committee on the Jopling reforms and their working in the first year. Again, I would not want to take decisions on that—the hon. Lady might be quite cross with me if I did—before even seeing the report, let alone having chance to discuss it with her. The hon. Lady well knows, however, that I am sympathetic to maintaining the reformed procedures, which have worked well.

Mr. Warren Hawksley: Will the Leader of the House try to arrange for the Secretary of State for Transport to make a statement next week on the future of Birmingham airport? The need is urgent because the Labour councillors, who have refused to date even to consider offers from West Midland Travel, the Richardson Brothers or other companies in the west midlands, are likely in the next fortnight to enter into a cosy arrangement with an American company to buy a 51 per cent. holding in that airport at less than the best price which could be obtained in the marketplace. It is important that we either debate the matter on the Floor of the House or have a statement from the Secretary of State for Transport.

Mr. Newton: For reasons that my hon. Friend will understand, it would be rash for me to make a promise from the Dispatch Box this afternoon of either a statement or a debate, but I have already mentioned the three-hour pre-recess debate on Wednesday morning. If my hon. Friend cares to raise the matter with me, I will try to ensure that I have some useful information to communicate to him.

Mr. Don Foster: I, too, thank the Leader of the House for his statement.
Following the Government's defeat yesterday in the Statutory Instruments Committee on the draft broadcasting orders, will the right hon. Gentleman tell us when he expects those orders to be debated on the Floor of the House?
Will the Leader of the House also give an assurance that, if a major change in the disposition of British troops in Bosnia is likely, the House will be recalled during the summer recess?
Finally, is the right hon. Gentleman aware of the growing concern which has followed the announcement by the Secretary of State for Employment and Education about nursery vouchers, and the considerable confusion which now exists about the value that those vouchers will

have for redemption purposes? Is it possible for the Secretary of State to write to hon. Members during the recess and for a debate to take place during the spillover period?

Mr. Newton: I do not anticipate a debate about the broadcasting orders on the Floor of the House, but I will certainly give the hon. Gentleman such information as I can when I have had a chance to make further inquiries. As for Bosnia, I have made it clear to hon. Members on both sides of the House for a long time that, if events develop in a way which seems to call for a statement, a statement will be made. It can fairly be said that such statements have been made at appropriate times, including one yesterday.
I have the impression that the plans for nursery vouchers have been widely welcomed, but there is more detailed work to be done. That is the purpose of the current consultation.

Mr. Peter Luff: May I endorse the call by the hon. Member for Dewsbury (Mrs. Taylor) for a debate on procedure? Such a debate would enable Conservative Members to explain to the Liberals the rights that they enjoy under the rules of the House to protect the interests of their constituents. Twice this week, Liberal party spokesmen have failed to understand what they can do for their constituents. On one occasion they thought that they could not speak during a debate that they had initiated; on another, they wrongly thought that their speaking time had been limited to 10 minutes. Such debate would provide a valuable opportunity to teach Liberals how to protect their constituents.

Mr. Newton: Given what I have heard, that is rather a good point. I must say that the usual channels on the Government side thought it rather strange that they should, in the end, have to assist the Liberals to keep their own debate going.

Mr. D. N. Campbell-Savours: Why is next week's debate on Nolan to last for a maximum of three and a half hours? Will not Government statements, speeches by Privy Councillors, amendments moved by individual Members and Front-Bench speeches completely wipe out any Back-Bench contributions? That is not Parliament speaking: it is a rigged debate. Why can we not have more time to deal with the matter?

Mr. Newton: I can only say that the arrangements that I have in mind have been the subject of discussion through the usual channels, and that I believe that they are for the convenience of the House. That is not to say that everyone will necessarily support them, but almost nothing in this place is supported by everyone.

Mr. Roy Thomason: Will my right hon. Friend arrange time for a debate on Hackney borough council in the near future, so that the Opposition Front Bench can dissociate itself from that council's actions and from the deplorable attacks on one of its officers and on civil servants that were made in the House yesterday?

Mr. Newton: As it happens, I have been given an account of some of the things that have happened in Hackney, which certainly do not make very happy reading. They include the suspension of the council's director of housing after he had complained that some of his staff were illegal immigrants involved in fraud. I am


sure that my right hon. Friend the Secretary of State for the Environment will bear my hon. Friend's comments in mind.

Mr. Alan Simpson: May I draw the right hon. Gentleman's attention to early-day motion 383?
[That this House welcomes the introduction of the Energy Saving Materials (Limitation of VAT) Bill by a cross-party group of honourable Members on 11th January; notes that the Bill will reduce the level of VAT payable on energy saving materials to 8 per cent. and that this is the same amount of VAT payable on fuel bills; agrees with the view of the former Chancellor of the Exchequer, the Right honourable Member for Kingston-upon-Thames, that a higher level of VAT on energy saving than that existing on energy use 'makes a nonsense of any attempt to use the tax system to improve the environment'; and hopes that the House will find the time to enable the Bill to become law.]
The motion relates to a Bill that I submitted, which proposed a reduction in VAT on energy-saving materials. Will the Leader of the House note that it now has the support of more than half the House? Will he accordingly arrange a debate next week, in Government time, so that we can debate the matter and my Bill can become law, and can receive the support of the House as well as that of the country as a whole?

Mr. Newton: I think that the answer to that is that it was a nice try. I see that the hon. Gentleman considers that fair comment. As he knows, his private Member's Bill is due to have its Second Reading on Friday and its fate is a matter for the House to decide.

Mr. John Marshall: May I join my hon. Friend the Member for Bromsgrove (Mr. Thomason) in asking for a debate on Hackney council, which is rapidly becoming known as the Monklands of the south? Apart from acting as a haven for illegal immigrants who are employed there, it has a deplorable record, with a large number of empty council houses and large rent arrears.

Mr. Newton: My hon. Friend will have heard me say that, on the accounts that I have, the story does not look like a happy one. He may wish to raise it further with my right hon. Friend the Secretary of State for the Environment at Question Time next Wednesday.

Ms Angela Eagle: May I, too, ask the Leader of the House whether it is possible to have a longer debate on the Nolan proposals next week? As a Back Bencher and a relatively new Member of the House, I stand little chance of getting into a debate of the length proposed. In the last Nolan debate, only two new Back Benchers got into the entire debate—I was one of them—although the proposals affect new Members perhaps more than some of the Privy Councillors, who may be leaving us and retiring at the next election. These matters are important for the reputation of Parliament and we need time for a proper debate about them, not a quick run around the houses in two and a half hours. Will the right hon. Gentleman please reconsider, especially as this Session is ending so early in July and there would definitely be extra days, when we could take time to debate those serious and important issues?

Mr. Newton: I cannot add to what I said earlier, although obviously I take note of the hon. Lady's representations, in line with those from the hon. Member for Workington (Mr. Campbell-Savours).

Lady Olga Maitland: Will my right hon. Friend consider a debate on Islington council, which has been described in a leader in The Times as a "rotten borough"? Is he aware of the strength of the White report into Islington social services, investigating dreadful stories of child abuse, prostitution, drug taking and paedophilia? Does he agree that it is right that the Labour party should come to the House and explain how it came to give that rotten borough so much support?

Mr. Newton: There are an awful lot of questions that I should quite like Labour Members to come forward with answers on, but that has continued to be a triumph of hope over experience and I dare say that it will remain so in relation to Islington.

Mr. Mike O'Brien: May we have an urgent statement from the Attorney-General on the serious allegations made to the Select Committee on the Treasury and Civil Service by senior Queen's Counsel that during the Roger Levitt case the Serious Fraud Office and its counsel provided information to the Attorney-General which caused him to mislead the House on relevant and material matters? In relation to that matter, should we not have an urgent statement and a judicial inquiry into the circumstances?

Mr. Newton: The hon. Gentleman will not expect me to accept what he says, but I will of course draw it to the attention of my right hon. and learned Friend the Attorney-General.

Mr. Dennis Skinner: May we have a debate on the different standards applying to Members of Parliament and to the people who provide the goods and services here in the restaurants and other such places, and on the contrast between the 88 days' holiday that Members of Parliament will be getting and the vile treatment handed out this week to some of the waiters and others who work in the Tea Rooms and elsewhere, who have been told that they must sign a fresh contract involving lower wages and worse conditions, and that if they do not sign it they will get the sack? One of the proposals by the Select Committee on Catering is to get rid of those workers' staff room and to provide a wine bar. Will the Leader of the House withdraw those proposals and ensure that proper negotiations continue?

Mr. Newton: There are two or three points there. First, the hon. Member for Workington (Mr. Campbell-Savours) was dying to answer the point about holidays. I think that I will leave Bolsover to Workington for that purpose. On the other points, the hon. Member for Bolsover (Mr. Skinner) will be well aware that those matters are for the Catering Committee, but I draw his attention to the fact that large-scale proposals exist for improving the catering facilities, not least in the interests of the staff. [Interruption.] I do not think that I will bother to go on as the hon. Members for Workington and for Bolsover are having their own wrangle on the other side of the House.

Mr. Paul Flynn: When can we have a full debate on a subject raised this afternoon in a telephone call to my office—[Interruption.]

Madam Speaker: Order. If there is to be an argument between the hon. Members for Workington


(Mr. Campbell-Savours) and for Bolsover (Mr. Skinner), perhaps they would have it outside. We all know what they are arguing about and most of us disagree with Mr. Skinner on the point in question.

Mr. Flynn: When can we have a full debate on the subject raised with my office by an elderly man two hours ago? He said that he gave his sick wife, who is suffering from multiple sclerosis, a new medicine which led to her having her best night's sleep for 30 years. In the eyes of the Government, that man and his wife are criminals who could be fined £2,500 and thrown into prison. He could have given her heroin or cocaine, which are legal, but instead he gave her a drug which has never killed anyone, which has been used for 5,000 years, is less poisonous than aspirin and is known to provide relief for serious pain. Why do the Government not accede to the request made by doctors, patients, relatives of patients and many others that they should allow cannabis to be used, not for general medical use but for serious cases—

Madam Speaker: Order. The hon. Gentleman is making the case that he should make in an Adjournment debate rather than simply asking for such a debate. Let us hear from the Leader of the House whether there will be such a debate next week.

Mr. Newton: I cannot promise a debate. The hon. Gentleman, who is well informed about these matters, will know that there are proper advisory arrangements for Government decisions about such matters. I am sure that his comments will be considered by my right hon. Friend the Secretary of State for Health who, as it happens, is due to answer questions on Tuesday.

Mrs. Anne Campbell: In view of the Government's defeat yesterday on the statutory instrument on broadcasting, may we have an early debate to discuss the Government's ability to carry through their own legislation so that we can discuss why the Government were putting forward secondary legislation which could not command the support of their own Back Benchers?

Mr. Newton: That was another nice try. When I was a Back Bencher I engaged in one or two exercises of the kind which appeared to occur yesterday. The hon. Lady will know that she is making too much out of that.

Rev. Martin Smyth: I welcome the fact that the Leader of the House has once again given us advance notice of the October resumption. Is it possible to find out from the Secretary of State for Northern Ireland whether, in those early weeks in October, he will be introducing the new parliamentary boundaries for Northern Ireland? If not, why is there such a delay?

Mr. Newton: I am not in a position to provide an immediate answer to that and I shall not pretend that I am. I will ensure that my right hon. Friend the Secretary of State for Northern Ireland is aware of the hon. Gentleman's points.

Mr. George Galloway: I draw the Leader of the House's attention to early-day motion 748 relating to unpaid Kuwaiti debts in London.
[That this House is gravely concerned at the plight of London businessman Mr. F. Salus, virtually bankrupted by the refusal to pay debts of £75,400 owed to him by two princesses of the Kuwaiti Royal Family, Princesses Nadia and Fatemah Al-Sabah, daughters of Sheikh Jaber Al Alim Al-Sabah, who engaged Mr. Salus to help build luxury flats in South Kensington at Manson Place, SW7, yet have persistently refused to pay Mr. Salus on the ridiculous grounds that they lost money on this investment which is their problem not their contractors, despite the entreaties of such British personalities as the Noble Lord Bethel, Sir Dennis Walters MBE, the honourable Member for Corby, Robert Evans MEP, the honourable Member for Brent East and many others; and considers that, especially in view of the great debt the Kuwaiti Royal Family owes to this country, the Emir of Kuwait should instruct his errant relatives, who are both multi-millionairesses, to make good their obligations to a British businessman whom they have all but ruined.]
The motion deals with the bankrupting of a London business man by two princesses of the Kuwaiti royal family. That royal family was returned to its throne at the point of British weapons just a few years ago. The early-day motion has been signed by 61 hon. Members from both sides of the House and includes in the first six names several knights of the realm, so great is the feeling that this act of meanness and hard-faced hypocrisy on the part of the Kuwaiti royal family should be acted upon by the British Government.
May we have a discussion about our relations with the emirate of Kuwait so that that British business man, who carried out works in good faith for members of the Kuwaiti royal family, can receive the relatively small amount of money for which he was bankrupted and so that relations can be normal between this country and the emirate? I fear that this issue will be a running sore in those relations if we cannot have such a debate and clear the matter up.

Mr. Newton: The hon. Gentleman will acknowledge that that is a matter of commercial debt and not something in which the Government could or should intervene. There are methods available to pursue such matters, if appropriate, in the civil courts.

Mr. Don Touhig: Will the Leader of the House find time for a debate on the decision by two universities for large salary and severance payments to be awarded to two vice-chancellors? One vice-chancellor was awarded £411,000 because he agreed not to make any comment for four years about the reasons for his dismissal. Should public money be used to buy the silence of a public servants in that way?

Mr. Newton: I will bring that question to the attention of my right hon. Friend the Secretary of State for Education and Employment.

Mr. John Spellar: Does the Leader of the House accept that, although the Government may wish to avoid parliamentary scrutiny for three months, the public outside do not understand why Parliament is shutting down for three months? It leads to the sort of misunderstandings that we have just seen. Does the Leader of the House accept that it does the image of Members of Parliament no good with the public, and will he reconsider that policy for the future?

Mr. Newton: We are experiencing the usual cross-fire at this time of the year. Most of the House recognises that


it is proper for the House to have a break, not least so that Members of Parliament can attend to matters in their constituencies, which they cannot do when the House is sitting four or five days a week. That is widely understood by our constituents and others, but frankly it is not helped when people like the hon. Gentleman seek to mislead them about the true position.

Mr. John McAllion: May we have a ministerial statement next week on today's award of all the contracts for running the Scottish national health service computer centres to a private firm—CSC— especially as I understand that there was under-specification in the contracts to create the illusion of savings in the NHS, as well as a hidden subsidy to the private company through the undervaluing the assets of the computer centres?

Mr. Newton: I will, of course, bring that question to the attention of my right hon. Friend the Secretary of State for Scotland. I am bound to say, however, that it is my experience that considerable advantages have been secured by using the private sector to undertake computer operations, very much including the social security system.

Mr. Alistair Darling: Press reports suggest that the Deputy Prime Minister has expressed the wish that the House should have the opportunity for a debate rather than just a statement on the report on Barings being prepared by the Bank of England. I do not know whether the Deputy Prime Minister has taken over the job of the Leader of the House as well, but can the right hon. Gentleman tell us whether we are to have such a debate?
Does the right hon. Gentleman agree that it is high time that we had a debate in Government time on the whole question of supervision and regulation so that we can discuss not only the problems at Lloyd's but those relating to the failure of self-regulation generally? That debate should be held in Government time—rather than in Opposition time, as has happened until now.

Mr. Newton: The right time to start thinking about such a debate is when we have the report of the Board of Banking Supervision.

Points of Order

Mr. Tony Banks: On a point of order, Madam Speaker. Yesterday I raised a point of order with you about a rave party that had been arranged at county hall and the possibility of it disturbing your peace and contentment. To prove the efficacy of points of order, I can inform you that I have received a letter from the Serjeant at Arms telling me that, following my point of order, permission for the rave event has been withdrawn by the owners of county hall, so you will now be able to enjoy a weekend of peace and contentment and the whole of London will rejoice with you.

Madam Speaker: I shall not be here this weekend, but in my constituency. Nevertheless, I am grateful to the hon. Gentleman, although it was not a point of order today any more than it was a point of order yesterday.

Mr. Andrew Mackinlay: On a point of order, Madam Speaker. May I have your guidance on how a certain problem can be remedied? Page 4593 of today's Order Paper shows that this evening there will be opportunities for two one-and-a-half hour debates, one relating to the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 5) Order 1995, and the other relating to the No. 6 order on the same subject. We can have up to three hours' debate on that matter; yet the preliminary draft budget for the European Community is not debateable. Surely it is time that we found some way to ensure that Parliament debates issues which matter to many millions of people rather than giving preference to orders about paralytic shellfish, which can be debated for up to three hours.

Madam Speaker: Some of the people who may eat poisoned fish might not appreciate what the hon. Gentleman is saying. The debates are perfectly in order. If the hon. Gentleman wants to change our procedures, he should approach the Procedure Committee.

Mr. Richard Tracey: On a point of order, Madam Speaker. I want to bring to your attention a matter relating to the statement on defence equipment an hour or so ago. The Ministry of Defence did not deliver any copies of the statement to the Vote Office, with the result that hon. Members from both sides of the House could not obtain copies and so could not question my right hon. Friend the Secretary of State in the necessary detail. That appears to be a singular breakdown of the procedures of the House.

Madam Speaker: The usual practice is for the Minister concerned to determine at what time the statement is to be placed in the Vote Office. Some Ministers have the statement put in the Vote Office as soon as they stand up to make it—others when they sit down. It appears that today's statement was not available when the Minister made his statement, but it was for the Minister to determine when it was to be made available. I take the view that it is rather better to have the statement available as soon as the Minister stands up, so that hon. Members can be made aware of what is in the statement and therefore ask rather more intelligent questions.

Mr. Patrick Thompson: Further to that point of order, Madam Speaker.

Madam Speaker: Order. I do not think that there can be a further point of order because I have answered it very


fully. I do not usually take further points of order. If the hon. Gentleman can make it into another one, I shall listen.

Mr. Thompson: I can make it another one because it relates to the issuing of statements to the Press Gallery, which has not been mentioned. Many hon. Members are disturbed when, as so often happens, the press get statements and information long before Members of Parliament. It is something about which I have felt strongly for 10 years. I hope that you will allow that as a separate point of order.

Madam Speaker: I certainly will, because I feel as strongly as the hon. Gentleman does. I quite understand why Government Departments have to keep the press informed, but there has to be a strict embargo and often, I suspect, the embargoes are not kept. That is when Members of Parliament get very upset and rightly so. I give them full support in their strong feelings on that.

BILLS PRESENTED

RIGHT TO WORK

Sir Ralph Howell, supported by Mr. Frank Field, presented a Bill to establish the right to work and to impose a duty on the Secretary of State to offer work instead of income support or unemployment benefit to persons who would otherwise be without work in the United Kingdom; to establish a system of grants to certain parents; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 158.]

FAIR EMPLOYMENT (DUTY ON NORTHERN IRELAND INDUSTRIAL DEVELOPMENT BOARD)

Mr. Michael Connarty presented a Bill to make it a duty of the Northern Ireland Industrial Development Board to promote equality of opportunity: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 166.]

ESTIMATES DAY

[3RD ALLOTTED DAY]

ESTIMATES, 1995–96

Class XIII, Vote 1

Social Security

[Relevant documents: Third Report from the Social Security Committee of Session 1994–95 on the Review of Expenditure on Social Security (House of Commons Paper No. 132) and the Social Security Departmental Report: The Government's Expenditure Plans 1995–96 to 1997–98 (Cm. 2813).]

Motion made, and Question proposed.
That a further sum, not exceeding £18,829,738,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Department of Social Security on non-contributory retirement pensions, Christmas bonus payments to pensioners, pensions etc., for disablement or death arising out of war or service in the armed forces after 2nd September 1939 and on sundry other services, on attendance allowances, invalid care allowance, severe disablement allowance, disability living allowance; disability working allowance; on pensions, gratuities and sundry allowances for disablement and specified deaths arising from industrial causes; on income support, payments of spousal and child maintenance, child benefit, one parent benefit, family credit, and on the vaccine damage payment scheme.—[Dr. Liam Fox.]

Mr. Frank Field: I thank you, Madam Speaker, for calling me and I am grateful for the opportunity to debate this group of expenditure measures. It is perhaps a sign of the difficulties that the House has in coming to grips with expenditure that, just as we are about to debate a social security budget fast approaching £90 billion, those few hon. Members who were here have left. The House was moderately crowded for the defence statement, but the defence budget is small compared with the total social security budget.
We must try to apply our minds to where that £90 billion is going, how good a job of stewardship the Government have done in safeguarding the taxpayers' interest and, perhaps more important, how successful the Secretary of State has been in his stated objective of controlling public expenditure on social security.
As I wish to be somewhat critical of the Secretary of State's stewardship, perhaps I should begin with some complimentary remarks. When he was moved to the Department of Social Security, the media, who do not always possess the greatest intelligence, reported his move from Trade and Industry to Social Security as an example of a Minister being dumped by the Prime Minister. Slowly, they have woken up to the fact that if one is not fortunate enough to be Prime Minister or Chancellor of the Exchequer, the place to be for someone who wants to be a big player at the top end of Cabinet table is in charge of the social security brief.
The Secretary of State has brought clear ideas about what he wants to do with his budget. This is, I think, the first full-scale debate that we have had in which we can

examine at ease his stated objectives and see how well he is achieving his goals. I should, however, sound a note of warning before we begin.
If we go back to Tory election manifestos and the excitement of election campaigns, we find that the talk was a little looser than it is today—it was about cutting social security expenditure; the goal then became to cut real growth in social security spending and it was limited to whether expenditure could be restrained so that it grew at a lower rate than the underlying rate of growth in the economy. I want to consider the Secretary of State's programme within that framework.
The Chancellor of the Exchequer said yesterday that he thought that the economy was growing at 4 per cent. a year. For the purposes of our debate, we should look carefully at the Government's record on growth and use it as our yardstick to compare how successful they have been in bringing the rate of growth of social security expenditure below the rate of growth of GDP.
Before I do so, I want to emphasise how important the debate is to many of our constituents. A short while ago, I was invited to write a column in The Sun and I willingly accepted. When I write a piece for the broadsheets, I am lucky if I get two or three letters—I am very lucky if I get two or three reasoned letters. I received about 50 letters as a result of that article in The Sun. One or two people said that if Labour had views like mine they were going to vote Tory.
I am not sure what they read into the article. A recent article in Nature suggested that the ear does not relay messages to the brain but that the brain controls what the ear hears. It is clear that the brain also controls what some people's eyes see. I received two outstanding letters, one of which I shall quote later. The other was written by one of my constituents and said how important it was that we consider carefully how our social security budget is spent. She wrote:
I am 65 and have been a widow since 1985, but I am still working 3 full days each week with a Liverpool based company, which enables me to maintain my home (which I own) and to keep a reasonable standard of living.
I realise I am lucky to have a job and an employer who is prepared to retain may services at my age, but because of my State pension, I am paying Income Tax to the tune of approximately £130 per month on my salary. Money, I may add, which I worked quite hard for and which, if it remained in my pocket, would make a considerable difference to my way of life.
However, I look around and see, not far from me, people much younger than I who are not working, some possibly because they cannot get a job, but a great number of whom, I am sure, do not want to work, and do not see the necessity to work, whilst they are receiving such good benefits from the Welfare State, and I know that the tax I have to pay is helping to provide these benefits.
We do not approach this debate in a light mood. We are very mindful of the fact that every day the welfare state has to be paid for by people in work such as my constituent, who is a pensioner and who pays £130 a month towards our welfare state. I shall return in a moment to how we should deal with a dependency culture and meet some of the other points in that letter.
Not long ago, the Secretary of State give the Mais lecture, in which he gripped his audience by saying that, on average, each day everybody in work pays £13 towards the cost of maintaining the welfare state. Less than 18 months later, he gave a similar lecture which updated his point to the Social Market Foundation. In it he said that, on average, every day people in work paid £15 towards the cost of underwriting our welfare state.
We have a paradox. The Secretary of State—of whom, I should have thought, most of us now have the measure—is serious about reforming the welfare state and wishes to cut growth in expenditure on it. A range of Bills has scrapped earnings-related supplements to national insurance benefits, cut benefits for disabled people and scattered asunder the remains of SERPS, but the daily cost of the welfare state to those in work has risen.
On one criterion it does not appear that the Secretary of State is succeeding. Welfare bills are increasing, but we can look at those figures another way. We know that the Secretary of State has made cuts: I am not accusing him of dishonesty or deceit. At general election time, the Government have always been clear about their programme. If ever a Government have had a mandate for their programme, it is this one.
After the latest round of cuts, the real budget for social security in the period 1994–95 to 1997–98 will rise by 1.3 per cent. The hon. Member for Colchester, North (Mr. Jenkin) is a member of Social Security Select Committee. When we were drawing up the report that forms the backdrop to our debate, he noted that the rapid upward push in the cost of benefits is continuing. Between 1997–98 and the end of the century—not many years— the real cost of welfare will rise by 2.1 per cent. That is another criterion by which to judge the Government.
Over the period of the Government's stewardship since 1979, the growth in the economy has been 1.9 per cent. After the latest rounds of cuts in welfare provision, the real cost will go up by 2.1 per cent. The Government's much-modified objective of controlling expenditure to below the real rate of increase in the economy is going to fail. I look forward to hearing how the Secretary of State will reply to that.
Their failure, of course, is not across a broad canvas; it is a failure on quite a narrow focus, on which I wish to make my contribution. I hope that it will be followed up by many other hon. Members.
The welfare state has three forms of benefit—national insurance benefits, for which we pay into the national insurance fund; what are called non-contributory national insurance rates or non-contributory, non-means-tested benefits, which go to people in certain categories such as parents who claim child benefit; and benefits that go only to those whose income is low and who qualify after a test of income. It is crucial that we consider which benefits are growing fastest and cause the most concern among not only the Government and Opposition Front Benchers but people outside such as my constituent who have to pay the bill. They wonder, if the present strategy continues, what scenario will meet us shortly after the turn of the century.
Let me break down the figures. The Government's record up to 1992–93 shows that the real-terms growth in contributory benefits was 1.6 per cent. The increase in non-contributory benefits, many of which are disablement benefits, was 6.9 per cent.
What has been the real-terms rate of increase in the means-tested side of the welfare state? I hope that we shall note from the Secretary of State's response to this debate, if he is lucky enough to catch your eye, Mr. Deputy Speaker, that there has been a subtle change in the Treasury's approach to means testing. In the early

Thatcher years, Ministers would wave their arms and legs and say that means testing was the way forward to concentrate help on those in greatest need and to target benefits. We hear a slightly different message from the Treasury Bench now, and I hope that we shall hear a development of that theme a little later in the debate.
Income support for pensioners has risen by 5 per cent. For those below retirement age, it has risen by 10.6 per cent. and for rent allowances it has risen by 15 per cent. Before the latest attempt to extend family credit to those without children, the figure for family credit had risen by more than 20 per cent. The Secretary of State's failure to control the social security budget is not a failure across the whole broad sweep of policy. His failure to meet his objective is caused by the great emphasis that the Government place on means-tested assistance.
Means-tested assistance is the destabilising part of the welfare state. The Secretary of State argued before the Select Committee that the present bill was not sustainable because of the impact that it would have on the functioning of the economy. There must clearly come a point when, if welfare bills are pushed up to a gigantic level, the economy is impaired. I think that the instability is caused by something much more important: the number of people whom we are now putting on means-tested assistance.
When I make a charge against that side of the welfare state, I make a charge against us—specifically the Treasury Bench. I am much tougher than the Secretary of State on fraud, and have no room for those who wrongly claim benefit. I am sure that other hon. Members will try to catch your eye, Mr. Deputy Speaker, and talk about how partial the Secretary of State still is to dealing with the issue as we would wish to see it dealt with, but he is a happy recidivist on that. Each time, he tries to take a tougher approach to deal with fraud and we are here to encourage him in that.
Means tests have a double effect on our constituents. First, they teach them to behave rationally and work the system—I shall give an example of that in a moment— and I do not blame my constituents or those from Colchester, where someone who wrote another letter is from, for doing so. They are behaving rationally within the framework that the House has set for them and in which they must operate.
On the other side of the coin, some people decide that income support and means-tested benefits should be some form of basic income and that they should claim it and continue to claim it while they work and do all sorts of other activities. I am now talking about how it destroys people's sense of worth, their desire to behave as decent citizens and the importance that we stress on working, saving and being honest.
The second letter says:
I am 59 years of age and was made redundant in August, 1994 (for information this was the 7th time I have been made redundant since 1976). In the past, I have always managed to obtain employment, mainly due to my knowledge and management skills. However, although I have applied, written, and telephoned over 300 companies during the past 10 months seeking any form of employment, even down to collecting empty trolleys at supermarkets or cleaning offices/factories, I have had no success mainly due to my age.
The person goes on:
My wife and I have always been great believers in helping ourselves as against making claims against the State and, therefore, when I was unemployed in the past we used our savings, plus our


then borrowing power, to pay our bills, rather than claim benefits. This obviously has meant that we have not had a holiday for over 10 years.
As my wife presently works between 40 and 48 hours per week and has a net wage of an average of £100 per week we are unable to claim any benefits other than unemployment benefit. We are advised by the benefits agency that, due to my wife working over 16 hours per week, once my unemployment benefit ceases in August 1995, we shall have to exist on her wage, or, as suggested by the social benefits and employment offices, my wife should cease work and my claim for benefit would then be considered …
I am informed that, based on current benefit figures, my wife and I would receive approximately £100 a week plus possible mortgage interest assistance, that being applicable when I reach 60 years of age in September of 1995.
Is it not absurd that rather than that man's wife continuing to work for £100 a week, he can draw benefits of perhaps £125 or £150 a week if his wife stops working? Would not it be better for him to be able to continue to draw unemployment benefit and for his wife to continue working? The cost of that to the taxpayer would be a third of what will happen under the rules in September, when his wife will be forced out of work because they will be better off on benefit. They are skint, they have used their savings and they are afraid that their house will be repossessed. They continue in the letter:
We have already had to live through the loss of our 2 daughters in 1969 and the loss of our home now would be more than we could stand.
They will stop working and will draw three times as much in benefit. It will appear as a saving in one account but, the following week, it will appear as a deficit and help to explain why the Secretary of State cannot control the budget as he wishes. There is nothing dishonest about those people. As the House has just heard, they have worked hard all their lives, scrambled for jobs and used up their savings. They will now behave rationally within the rules that the Government have set. It often pays not to work and to work the system.
Others, of course, feel differently and are not quite so conscientious as that person from Colchester; they feel that income support and housing benefit are there for the taking as of right. They think that it is a basic income that people should use, and they add to it whatever income they can get from work.
The means-tested side of the welfare state is the fastest growing side. It penalises people if they get a job, confiscates their savings and taxes honesty. It cannot be sensible for a country to have a welfare state, the fastest growing part of which has those effects on human character. We have lived through an important time in which the Secretary of State, with a clear vision of what he has wanted to do, has come to his Department, seen the enormous opportunity to apply his own ideas and ideology and bring about change. Yet as I said at the beginning, the figures do not look good given his objectives for the welfare state.
We can all learn lessons from this tale. I do not believe that we can control public expenditure, or the largest part of it—a third of all the money contributed by taxpayers— if we have a strategy like the one pursued by the Government, which pushes more and more people on to means tests and then finds it impossible to control that part of the budget. It is impossible to control it because, as I described using the example of the gentleman from Colchester, it is rational. The only option is to work the system, and doing so, in that instance and many others,

increases the cost of welfare not onefold but threefold, and people feel a failure because they have been unable to get a job. They must now exist totally on benefit— something that the family from Colchester have fought all their lives.
Other people believe that welfare is an easy touch. I welcome the statement that the Secretary of State made recently—and, I believe, the other eight that he has made—on clamping down on fraud, but he has a long way to go.
The Select Committee is considering that matter with deadly seriousness. It is easy enough to pick on single mothers and those who work on the side—although the Secretary of State has not quite got the measure of either of those yet in the fraud clampdown that he has announced—but we are equally worried about the fraud that sophisticated gangs must be perpetrating against that £90 billion budget. It is inconceivable that the budget is somehow gated by behaviour characteristic of the garden of Eden. Given what we know about City fraud and fraud in financial institutions, it is unthinkable that similar techniques are not being used against our budget of £90,000 million.
I believe that we do not yet have the measure of people committing that type of fraud. I fear that the task will be fraught with danger for those officers who begin to get a grip on it. Not so long ago, some people were sentenced to life imprisonment for shooting officers who were checking up on MOT frauds. We shall be tackling very nasty, very vicious, very violent people who are uninterrupted in their activity in ripping off our £90,000 million social security budget on a mass scale.
For that reason, I call for officers of the highest quality—of Special Air Services quality and rewards—to undertake that task for us, for I fear that it may not be that long before the Secretary of State has to come to the Dispatch Box to announce what has happened to some of the officers in his Department when they do get to grips with fraud in that sector.

Mr. Malcolm Wicks: Does my hon. Friend agree that, if the Secretary of State's recent estimates about the scale of fraud are correct, it must mean that, during the stewardship—to use one of my hon. Friend's favourite words—of the present Government, billions and billions of pounds have been fraudulently used? Is that not a matter of great concern? In spite of the platform rhetoric at seaside resorts every year, the Government have effectively been soft on fraud.

Mr. Field: I like teasing the Secretary of State that he is soft on fraud and soft on the causes of fraud, but he is getting better and we should encourage him in that endeavour.
My hon. Friend is absolutely right. We have always heard such rhetoric from the Conservative party at elections and at party conferences. Given the partial nature of the current measures, if they had been introduced in 1979, not only would we have ensured that improved anti-fraud measures were now in place but huge tranches of money would have been saved for taxpayers. My constituent who pays £130 a month in taxes on her three days of work a week is the type of person who has been cheated.
I do not believe that the Government have a strategy other than cutting entitlement and, late in the day, trying to screw down on fraud. If we are to bring the budget under control successfully, we must propose an alternative programme.
In conclusion, I shall mention three things that I believe that we must do. Before the millennium, we shall receive the full force of taxpayers' opinions about what they want to happen to public expenditure. The thought that we can maintain public expenditure at the present level is an illusion that politicians should not have.
Opposition Members may pretend that it will not happen—and allow public opinion to hit us in the face— or try to devise strategies whereby we leap ahead of where the electorate will be in a few years' time and set out an alternative stall.
I hope that we shall consider carefully the proposal of hiving off the national insurance side to a corporation or perhaps, to use a more friendly phrase, an organisation run by the punters themselves—both contributors, employers and employees—with the Government having' a say. That organisation would set rates of benefit and gradually take over what is currently the national insurance system.
It would cover the whole of that sector in time, but it would, for example, tackle the problems that the letter that I have just read reveals. If people could quickly requalify for insurance benefit when they were unemployed, as they could under the 1911 scheme, many more people would be prepared to take risky jobs, hoping that the job would last long enough that they at least got their insurance credits back so that they could again benefit. We know that, if they received benefit, their wives and other members of the family could continue to work and they would not get caught back on means-tested assistance. We know that, once most of our constituents are on means-tested assistance, it is almost impossible for them to break free.
The second long-running reform is to ensure that everyone has at least one pension other than the state retirement pension: in other words, universalise private provision of pensions; everyone will have to be in. If Tesco can run a pension scheme that admits part-time workers after the first hour of work, everyone can run an equivalent scheme, or at least allow people to opt into a national scheme that provides such coverage.
The final thing that we must do if we are ever to control the estimates that we are debating today is to change totally the culture of income support, which is that of a passive agency, paying out benefit, into one that is proactive, helping people back into the labour market.
I propose that everyone on income support who is below retirement age should be expected to draw up career plans and use their income support payments to achieve those objectives.
In previous debates, my hon. Friend the Member for Croydon, North-West (Mr. Wicks) has given us a powerful example of why that change should occur. He gave us the example of a single parent in his constituency, visiting her income support office, saying to officers that she wished to become a traffic warden. The officers fell about laughing. They said, "You've got it wrong, love. Our job's to pay out money; it's not to help you get a job."
That is an appalling state of affairs. Those officers were behaving properly. Their job was to pay out money, not to help claimants achieve the objective of getting back into work.
I know that problems are involved with such a scheme, such as how to ensure that child care is available—which probably goes beyond giving a few people already receiving child care, vouchers worth £1,000 a year. However, we must change that culture of drawing benefit and then merely existing on benefit if we are to achieve significantly greater success than the Secretary of State in controlling growth in social security expenditure.
I finish as I began. The Government have made wild claims about the way in which the social security budget, the largest of any Government budget, will be controlled. Their first objective was to hack it back, then it was to cut it in real terms, then it was to control the increase in real terms and then it was to cut it enough so that in real terms it was growing slower than the real long-term growth in the economy.
The figures that I gave at the beginning show that the Government have failed on all those objectives. I do not present those figures merely to crow at the Government. This is an immensely serious debate. The social security budget is the largest part of expenditure to which taxpayers contribute each week with their hard-earned money, and the Government have failed to control it. I hope that, before the general election, we shall make proposals that show that there is an alternative to the present regime.

Ms Liz Lynne: I want to praise the report by the Select Committee on Social Security. It is very constructive and it has a great deal of common sense in it, especially the call for more regular information on expenditure and growth and the recommendation for more research, which is needed for the wide range of benefits that we are discussing. The most radical idea in the report is that Government Departments should estimate the cost of their policy decisions on the social security budget. I sincerely hope that the Government will take that idea on board. There are so many areas that such estimates could cover, including housing and employment.
The abolition of the wages councils obviously had a tremendous effect on the social security budget. The Government spend £2 billion subsidising low-paying employers and they top up the earnings of 1.7 million people. Far from the Government learning from the abolition of the wages councils, they have taken matters a step further and we now have the jobseeker's allowance. On Report in another place on the Jobseekers Bill, the Government opposed an amendment that would have given the right to every person to turn down a job for which the wage was lower than benefit. In other words, the Government have rigged the labour market, because benefit will be stopped if the claimant does not take the low-paid job. Employers will be able to offer wages lower than the wages that they offer at the moment, because they know that unemployed people will have all their benefits cut unless they take the low-paid job.
For single people and couples with no children, the introduction of the jobseeker's allowance could mean that they will live below the poverty line. I know that the Government are introducing pilot schemes to look at


benefits similar to family credit for those with no children and for single people. Already, however, couples with children have to have their earnings topped up by family credit and the family credit budget is continuing to soar; it has doubled in the past four years. Employers are exporting their wage bills to the taxpayer, which is totally unacceptable.
The same point applies to housing. If Government Departments had to estimate the cost of their policy decisions on the social security budget, would the control of council house receipts remain? I very much doubt it. If that policy were adopted, unemployed building workers could get back into work. Other employers would be able to take on people, because the knock-on effect of houses being built would be to the benefit of suppliers to the building industry. If councils were allowed to spend the receipts, there would be low-cost, local authority housing, which would stem the rise in the housing benefit bill. It must make economic sense for the Government to adopt that policy.
The Select Committee stressed the disturbing growth in means-tested benefits; it talked about the unemployment trap and about the low-income employment trap. The Committee looked, but it failed, unfortunately, to recommend that the tax system should be looked at at the same time as benefit reform. By close integration of the tax and benefit systems, the effects of unemployment and the poverty trap would be somewhat mitigated.
At the time of the Budget, the Liberal Democrats suggested that we should take 50,000 low-income earners out of the tax system, which would have helped with the family credit bill. I know that, with all the publicity last week, another report by the Select Committee on Social Security, which dealt with the compensation recovery unit, was somewhat ignored. Reforms would reduce the injustice suffered by personal injury victims and would mean that, instead of the money being clawed back by the Treasury from the victim, it would be clawed back from the employer. That proposal would be revenue-neutral for the Treasury. I would be grateful if the Minister, when summing up, would refer to the proposal.
Another area that has been well documented in the past few days is benefit fraud and I welcome the Government's initiative on that, although it has to be said that they have introduced many initiatives, but have not followed them through. The initiative will not be taken seriously by the claimants who are defrauding the system unless they can see that tax fraud is treated equally. I welcome the survey by the Department of Social Security and its estimates of the money that is lost in benefit fraud. I would like the Treasury to carry out a similar exercise on tax evasion. How can we persuade people in a lower income bracket and those who defraud the benefit system to be honest when people at the higher end defraud the tax system?
The main aspect of the Select Committee report which I welcome is that all Government Departments should assess the cost of their policies on the social security budget. That is the way in which to get the social security budget down instead of penalising the people whom the Government penalise at the moment—the unemployed, who will be affected by the cut from 12 months to six months of benefit, and disabled people. I hope that the Government will look seriously at the initiatives set out in the Select Committee report, which I commend to them.

Mr. Tony Banks: I say for the record that the London borough of Newham is the most deprived local authority area in England and Wales, according to statistics from the Department of the Environment. As someone who represents and lives in the area, I can bear witness to the general level of poverty in the east end of London—in Newham, Stratford, Upton Park and West Ham. Strangely, I get far angrier—it is not synthetic anger—than my constituents when I see the poverty that they have to deal with.
I am unmoved by talk of the need to crack down on fraud, not because I am in favour of fraud, but because I am far more concerned about people who do not receive benefits to which they are entitled. I am more concerned about them than I am about those who are trying to get more out of the system than they should. I am a great supporter of those who want to crack down on fraud, but I am an even greater supporter of those who want to make sure that the benefits go to those who need them most and that people are receiving what they are entitled to.
I do not understand how some people in my area exist from breakfast to dinner—assuming that they get either a breakfast or a dinner. They have to live on levels of income that Members of Parliament have no experience of whatever. Members of Parliament will spend more on the Terrace this evening—so will I—than some individuals have to spend in a week. I am not claiming that I am impoverished—far from it. However, when I hear Members of Parliament going on about levels of benefit and about how we need to ensure that they are appropriate, I realise that there is a great stench of hypocrisy, as ever, hanging around this place.
More than 18,000 people in Newham are unemployed and there is an unemployment rate of 19.5 per cent. Some 85,592 people in the borough depend on income support. Unemployed people make up 41 per cent. and lone parents make up 19 per cent. of income support claimants. Those figures show the extent of the poverty in my part of the east end. This evening I draw attention to the changes that will be introduced on 1 October in respect of mortgage interest payments.

Mr. Frank Field: The figures that my hon. Friend has cited from his borough are very interesting, because they are the exact opposite of the national figures, which show that the number of unemployed people drawing benefit is exceeded by the number of people heading single-parent families and trying to raise children on their own. That illustrates the fact that recent labour market policies have decimated jobs to the extent that inner-city areas do not reflect the national average, which shows that twice as many single parents are drawing benefits compared with unemployed people. In our areas, there are twice as many unemployed benefit claimants as lone parent benefit claimants.

Mr. Banks: As usual, my hon. Friend makes an excellent point and we all defer to his expertise in such matters.
Speaking as a lay person, I would like the Secretary of State and his Ministers to sit in my advice surgeries and hear what is going on. I want them to see the situation for themselves, instead of sitting in Departments and receiving advice from civil servants. I am not suggesting that the Secretary of State and his Ministers do not visit


offices in their constituencies and listen to people's problems, but if they could visit the east end, be a fly on the wall and listen to people's stories, perhaps they might show greater concern for low levels of benefit rather than constantly making accusations and creating the impression that people are living the life of Riley on income support or social security benefit. It is certainly not the sort of life that I would want to lead—even on the most generous level of benefits currently available.
I want to ask the Secretary of State about some of the changes to come into effect on 1 October. It appears that most people under 60 years of age who buy a house or take out a loan for repairs after 1 October will receive no income support assistance with mortgage interest or service charges for nine months. That is outrageous. Ministers have been lobbied about the matter and some groups have been granted a reprieve. As I understand it, they will be classed as existing borrowers. But what about recently deserted or widowed people, who will be included in that group only if they have children? We believe that the decision will cause great hardship to many women in my area who have spent years as carers and so do not have any employment. The Minister must consider that point.
There is also the question of the standard rate of interest. Income support mortgage interest is currently calculated on the actual amount of interest. The change to a standard rate of interest for all claimants will be set at the average mortgage interest rate for probably an annual period. Those with high interest rates will have a shortfall, which benefit will not cover, and that will affect particularly those people on low incomes who end up with expensive loans. That will create enormous problems in my area.
Assistance with accumulated arrears is to be abandoned. Interest will no longer be paid for arrears built up during the initial non-payment period and that will lead to increased debt and homelessness. The Government's excuse for abandoning that assistance is that the calculations are very complex—but so are the calculations for child support, and it has not been abandoned. The calculations could be made if the Government had the political will to do it.
I return to the effect of the changes in Newham. After 1 October, they will take effect slowly and insidiously over two or three years as new claims are made and more people are affected by the restrictions. Last year, Bow county court dealt with 4,000 mortgage repossession cases. Where do people go after that? They turn to the local authority. I get very angry with the Government for deflecting those problems to the local authority, which then has a statutory obligation to try to house the people whose homes have been repossessed.
Bed-and-breakfast accommodation comes into play. We are still spending millions of pounds on the provision of short-term and bed-and-breakfast accommodation. The Government simply shift the problem from their jurisdiction to that of the local authority. Conservative Members then talk about high rent arrears and empty local authority housing stock. They say that the problems are the responsibility of the local authority and they ask why

nothing is being done. The Government think that they are dealing with the problems, but they are not: they are simply shifting them somewhere else.

Mr. Field: I am grateful to my hon. Friend for giving way again. Last Friday I visited Salford, where the citizens advice bureau provides a service in the courts for people who face homelessness through repossession. That work underlines the point that my hon. Friend made earlier about people receiving the entitlements that they deserve. The CAB finds that many people who face eviction because of mounting debts—the situation will worsen when the changes are introduced—are not receiving their proper entitlements. There may be minor savings initially but, as my hon. Friend pointed out, there is a massive increase in public expenditure when people whose homes have been broken and whose families have been torn asunder are placed in bed-and-breakfast accommodation.

Mr. Banks: My hon. Friend represents a constituency that is not dissimilar to my own, and he has seen the evidence. We are not making up the stories. The changes will not affect our personal circumstances, but they will affect the people whom we represent. Members of Parliament have a duty to bring those facts to the Secretary of State's notice. Instead of listening to arid discourse from departmental staff, he should listen to those who represent the people who are most affected. That is why we bring our cases to the Secretary of State.

The Secretary of State for Social Security (Mr. Peter Lilley): In addition to bringing the cases to my attention—I have listened attentively to his comments and I know that his argument has a great deal of force—has the hon. Gentleman had any success in persuading his own Front Bench to increase the level of benefits? Did he hear his leader say this week that benefits should be altered and that there should be massive reform of the welfare state, so that benefits out of work are less than what people receive in work?

Mr. Banks: Only time will tell whether I am having any success. I assure the Secretary of State that I would be far happier taking my case to a Secretary of State of my own political persuasion, because I am sure that my colleagues understand the problems better and would take a far more realistic approach to the level of benefit.
I shall be honest with the Secretary of State: my argument will not alter—in fact, I shall be twice as angry—if a Labour Government do not address the problems of the east end, because the people of the east end have loyally supported the Labour party for generations. They are entitled to expect assistance from a Labour Government whom they elect. I am sure that they will receive that satisfaction. But if they do not, I assure the Secretary of State that my voice will be raised most stridently on their behalf. However, I suspect that my support will not be needed to the same extent that it has been needed since 1983.
I shall not detain the House much longer. I seek clarification from the Secretary of State about two more issues in the context of the estimates debate. I understand that the new in-work benefit pilot, the earnings top-up, is a benefit like family credit, but for people without children. It is a means-tested top-up for people on low


wages. It will pay up to £54 per week, with an average of £23 per couple and £19 for a single person aged 25 and over. It amounts to a subsidy for low wage rates.
Conservative Members ask what a minimum wage will cost, but what is it already costing the taxpayer to subsidise rotten employers who pay lousy, stinking, strip-out wages? No one in this place would work for such wages. They would laugh; they would not even get out of bed. If Members of Parliament were offered that sort of rate for a BBC or an ITV interview, they would turn it down. Of course, I would not turn it down; I would do it for free, as hon. Members well know—but that is another matter. Money does not interest me in the same way as it interests so many on the Government Benches. We are talking about ludicrous wage levels, and we are asking the taxpayer to subsidise rotten employers. The sooner we get a decent minimum wage in this country, the better. In the end, it would be a saving for the taxpayer.
In the earnings top-up pilot scheme, a number of areas have been selected, but none of those is in London. I would like to know rather more about that. Even though I do not over-approve of the idea of subsidising rotten wages, why has not any area in London been chosen? There are plenty of rotten, low wages paid in London.
The Secretary of State announced new initiatives to combat fraud on 11 July. I made the point at the beginning of my speech that I am not here to support fraud, but I am also not here to support this hue and cry about fraud and its use as a divisive mechanism in our society. The idea that, nudge, nudge, wink, wink, anyone receiving social security is on the fiddle, seems gradually to be creeping into the public consciousness. It is expressed so often in vulgar opinion. I might add that I heard my hon. Friend the Member for Birkenhead (Mr. Field) talk about his article in The Sun. I understand that it pays very well for articles, incidentally.

Mr. Field: I am still waiting.

Mr. Banks: My hon. Friend is waiting to be paid. Perhaps he needs a good agent. I am quite prepared, for a reasonable remuneration, to hurry it along a bit.
The Sun is one of those newspapers that tends to suggest that somehow people who are on benefit are getting some sort of handout to which they are not entitled; it is really a fraud being perpetrated on the population at large. It is very dangerous to use such words and give that impression.
We understand that fraudulent claims cost the taxpayer £1.4 billion a year and it is absolutely right that something should be done about it. But when do we hear Ministers waxing about the number of people who fiddle their Inland Revenue claims, or employers who fiddle national insurance? Where are all the initiatives to bang that stuff out? Such white-collar fraud in the City, by employers and by those who are evading tax, amounts to billions and billions of pounds and makes the fraud on social security seem like money in the old back pocket.
I would be much more impressed by the Government's determination to crack down on fraud if they took an even-handed approach; if they were as rigorous in trying to deal with Inland Revenue and national insurance fraud as they are with respect to the payment of benefits.
I want to ask the Secretary of State a specific question about home visits, because I notice that, in the endeavour to cut fraud, there is talk of 300,000 extra home visits

across the country. When a home visit is deemed to be required—for example, when the person involved is a single parent—are they planning to reduce income support until that visit has taken place? This is important. I want to know whether my constituents will lose while they wait for a home visit. Although 300,000 extra home visits are planned, I suspect that the Department will soon start saying that it has not got the staff for them. I do not want to find that potential claimants are penalised for waiting for a visit when there are simply not enough Benefits Agency staff to ensure that that visit takes place.
I return to the question of those who do not get the benefit to which they are entitled, as my hon. Friend the Member for Birkenhead said. From Government figures, we estimate that in Newham something like £12 million a year in means-tested benefits is simply not being taken up. What is the Secretary of State going to do about that? When he shows as much enthusiasm for ensuring that people who are entitled to benefit get benefit, I will be equally enthused by his attitude towards some of the other things that he constantly talks about, such as fraud and targeting benefits on people who are most entitled to them.
Perhaps those points put a little flesh on these bare estimates. They come as a witness from someone who has to deal with a whole range of poverty. The worst poverty of all that I have to experience in the east end is the poverty of expectation. The people I represent have a very low level of expectation. I want to ensure that their sights are heightened and that they have a vision of a better society in which they can receive a decent level of benefit when they need it. That is what we want, and I am quite sure that, when my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is the Secretary of State for Social Security, that is exactly what we shall get.

Mr. Jeremy Corbyn: It is a pleasure to follow my hon. Friend the Member for Newham, North-West (Mr. Banks), who explained well the plight of the people whom he represents and the poverty throughout the east end of London. Indeed, one would find similar levels of poverty in every inner-city region in England, Wales and Scotland. The Evening Standard report on the levels of poverty in London makes very grim reading. Within a 15-minute car journey from this House, one can find people living third-world levels of existence, health and expectation in a supposedly wealthy and prosperous society.
The Government complacently preside over a social security budget which they claim is growing very fast, and say that it cannot continue to do so, yet at the same time, statistics have shown that, since the Government came into office, the biggest growth in inequality of any industrialised country, the biggest growth in poverty among industrialised countries and the biggest growth of the super-rich among industrialised countries have all been in Britain.
That is a direct result of a taxation system and policy that has given huge tax breaks and rewards to the already very rich and soaked the poor to the extent that they now pay more in taxation than ever before. The poorest 10 per cent. of the population, who tend to reside in the inner cities, although not exclusively, have seen their living standards fall by at least 14 per cent. over the past decade and more, and it is getting considerably worse for them.
Within that context, we must measure the Government's proposals and plans. I am fed up with social security debates being dominated by two factors: the costs of the social security system and the question of benefit fraud that goes with it. I have no time for fraud, any more than any other hon. Member. The speeches of my hon. Friends the Members for Birkenhead (Mr. Field) and for Newham, North-West outlined that. The Government have an obsession with dealing with the idea that somebody has over-claimed 10 quid on housing benefit or somebody has worked two hours more than he is allowed under the benefit rules and therefore is a serious fraudster.
Meanwhile, high levels of white-collar crime go on and huge syndicates are at work defrauding the housing benefit system. The London Labour boroughs got together as a consortium to try to sort that out, with precious little thanks or support from the Government for doing so. In fact, the Government condemned the boroughs for allowing such fraud to exist in the first place. It was not the assiduousness of the Department for Social Security or of the Secretary of State that sorted that out, but the inner-London boroughs.

Mr. Frank Field: Does my hon. Friend recall that some of the London boroughs wishing to bring prosecutions against landlords and landlords' agents who were ripping off the housing benefit budget to a tune which I do not think that the House yet properly understands, and were told when they presented their information to the Serious Fraud Office that it did not understand enough and that the boroughs should bring the cases. Yet those boroughs either have been rate-capped or face capping and therefore do not have the funds to bring the desired prosecutions. Is that not an extraordinary state of affairs?
The Government say that they are serious about fraud, but when certain London boroughs support them and become serious about tackling it, and there is a chance of bringing into court some very rich people who are taking enormous sums out of the housing benefit budget, the case falls to the ground because nobody wants to foot the bill for the prosecution.

Mr. Corbyn: My hon. Friend is right. He makes a very important point with which I hope that the Secretary of State will deal when he replies. Those big fraudsters should be taken to court and the Government should ensure that the resources are available and that the Serious Fraud Office takes the cases. Whenever there is a growing problem to the extent that the Government cannot handle or control it, they pass it to local authorities. At the same time, the Government make damn sure that local authorities do not have the resources necessary, then criticise them for not solving the problem. Local authorities are the perfect enemy for a Tory Government. It is like an obsession for them.
The large increase in housing benefit expenditure does not benefit the tenant. The budget has grown because of rent deregulation in the private sector, the rapid increase in housing association rents and the almost as rapid increase in local authority rents. Local authorities do not benefit from administering the housing benefit budget but are penalised for so doing. I am glad that the Select Committee will examine the burden on local authorities

of administering a housing benefit budget and all the grief that goes with it, when those authorities are not given the resources to perform that task.
It is extremely depressing that, any time that we want to examine part of the welfare state, yet another agency is created. Such agencies have succeeded in ensuring large job losses, with fewer people doing the work—often, less efficiently than in the past. The Government's attitude to people who have dedicated much of their lives to making the social security system work is to make sure that those people end up working for an agency, then to change their contracts of employment and conditions of service.
Government statistics often claim that UK pensioners are at least 33 per cent. better off than they were when the Government came into office. That figure varies— depending on which Minister one talks to, or on which television or radio programme he appears—between a low of 32 per cent. and a high of more than 45 per cent. I have never met pensioners who are better off to that extent. I do not doubt that some extremely wealthy pensioners are doing better than average, but the majority do not have huge occupational pension incomes—if they did, they would be taxed on them anyway.
Many elderly widows have no income other than their state pension and housing benefit and are often badly off. They have been penalised by the breach in the link with earnings made by Geoffrey Howe in 1980, who called it his greatest achievement as Chancellor of the Exchequer. We can imagine his aspiration. He succeeded in robbing every pensioner in the country of about £20 per week by breaking the earnings link and substituting one with the retail price index.
Ministers predict that the pension level will become nugatory by the end of this century. That is a standing invitation to everyone in middle age to make some sort of private pension arrangement, because that is the only way of guaranteeing a reasonable income on retirement. That attacks the principle of the state pension. Likewise, we witnessed the Government's use—or abuse—of the Government Actuary in the 1980s, to reduce the value of SERPS and thereby increase market opportunities for the private pensions industry.
I do not apologise for strongly supporting the principle of a high-level state pension and a fully funded SERPS that can eliminate poverty in retirement years. There is no security in private pension schemes sold by high-pressure salesmen working only for commission. A lot of tragedies are waiting to happen in the next 15 or 20 years. I hope that someone will be around to pick up the tab for the tragedies that will occur as those schemes collapse.
The Government have done much to make the benefits system more complicated and less effective, including the tragic removal of benefits from 16-to 17-year-olds, changes in the housing benefit system, family credit and now the publication "Piloting change in Social Security: Helping people into work". The Government deregulated the labour market so that hourly wage rates, particularly for young people in service industries, are shameful and a disgrace.
People throughout the country are being pushed into jobs offering wages of £2 per hour or less. The Government know that it is immoral for people to work for such low pay but, instead of doing something about it, such as restoring the wages council system or supporting a national minimum wage, the Government—to assuage


their guilt—introduced family credit and now propose a wider variety of top-up measures, to subsidise low-wage employers. That is a disgraceful vista.
Some extremely prosperous and profitable firms are deliberately paying low wages because they know that they can get away with it. People in the worst situations will have to apply for social security benefits to top up those low wages, and that is wrong. I strongly support a national minimum wage, which should be fixed at half male average earnings, at about £4.20 per hour.
Large numbers of people who suffered accidents at work and became invalids now face the most rigorous medical checks possible in the interests of cutting their immediate and long-term benefits. Government expenditure predictions show that they expect to spend less and less on invalidity benefits, mainly in respect of injuries arising from accidents at work.
Will the Secretary of State comment on the operation of the habitual residence test, which he introduced after his idiotic speech to the Tory party conference, when he said that he would stamp out benefit tourists from Italy? He tried to put on an Italian accent and to speak Italian. He used xenophobic arguments to introduce his test.
I will tell the right hon. Gentleman how it works. People who go abroad to visit their families, work, or see sick relatives in west Africa, the Caribbean or anywhere else return to this country to be told that they do not merit benefits. They lose income support and the right to receive housing benefit. They can become homeless and children may go hungry—all to appease a xenophobic audience at a Tory party conference.

Mr. Tony Banks: What happens then is that such people turn up at the borough council's social services department to seek assistance. Again, the problem is shifted to the local authority as a result of Government policy. It is all very well for the Government to claim that they are dealing with the issue, but they are not. They are transferring responsibility to hard-pressed local authorities, which is a disgrace.

Mr. Corbyn: My hon. Friend is right. If people can get through the maze of appealing against a habitual residence test decision, in many instances the result can be reversed, but the family has to suffer the heartache and headache for weeks and weeks, if not months and months. All that was the result of the horrible atmosphere of xenophobia encouraged by the Secretary of State in his Tory party conference speech.
We have witnessed in our own lifetimes the development of a comprehensive welfare state designed to insure people against poverty, poverty in old age and poverty when out of work. Over the past 15 years, we have seen a systematic attack on those principles. The Government keep saying that the current level of welfare spending is unsustainable—that there are too many elderly and poor people and too many demands on the system. There are not. The Government are more interested in reducing tax for the already rich and redistributing wealth in favour of the wealthy, while letting the poor rot and creating an underclass.
The Government are fond of quoting international comparisons, but those comparisons show that this country spends rather less on the welfare state than do most western European countries. International comparisons also point up the big con that the

Government are perpetrating as a way of cutting back the welfare state. I believe strongly in the principle of a community that supports those in need at all times, not a community that punishes them for being poor and needy.
We heard a great deal about the international competitive market in the course of the social security inquiry. We were told that our marginal rates of tax are too high in Britain and that we can no longer afford the welfare state. We cannot go on playing ducks and drakes with people's poverty around the world—large employers say that wages are too high in Britain so they will move their firms to Spain unless British workers are prepared to drop their demands. Then the people in Spain are told the same; then the workers in the far east will be told the same, and so it goes on.
We need international comparisons that eliminate, not create, poverty. We need comparisons that guarantee security instead of creating misery and insecurity. I hope that an incoming Labour Government will reverse the policies of this Government and introduce instead a poverty, or redistribution of wealth, index. Thus, instead of looking at the bald costs of a service, we shall look at the effects of that service and the effects of the social security system as it eliminates serious poverty. I look forward to that.
Like my hon. Friend the Member for Newham, North-West and others, I see far too much poverty around me. I see far too many children unable to achieve at school because their families are so poor, with all the attendant poverty of expectations. There are many brilliant minds wasting away on dole queues, many children growing up in overcrowded accommodation—all of which leads to under-achievement at school.
Our benefits system is failing the people, and the Government are deliberately making sure that it fails them.

Mr. Malcolm Wicks: Much of the debate so far has dealt with past and current trends. We need also to recognise, looking ahead only 10 years or so, that there will be many demands on the social security budget and some newly recognised needs that will need to be taken fully into account. If any Government fail to go in for some radical thinking and some radical restructuring of the social security programme, their leaders, Conservative or Labour, will be left as frustrated Ministers.
One newly recognised need that I have in mind is the need for long-term care. If Sir William Beveridge were writing his famous report today and assessing, as he did in 1942, the risks that people face over their lifetimes— injury, sickness, unemployment and the likelihood of retirement—I think that he would argue that one of the risks that should be built into our social insurance system is the eventuality that a person will need, if not conventional care, then what we now call long-term care. Many of us who survive into our 80s or 90s will become frail, not necessarily needing urgent medical attention in hospital but needing intensive social care, in our own homes or, failing that, in various kinds of residential institution.
We all know that many of our constituents need long-term care requiring the payment of thousands of pounds a year, and many of them watch as their lifetime


savings disappear because they have to pay for the care if they are not protected by the social security system or social services departments. There is a strong argument for building into our social security system protection against that sort of risk. That will be debated a great deal in the coming months and years; we need such a debate, and we need to examine the different options. If we do cater for that risk, it will place new demands on our social security and national insurance system—

Mr. Frank Field: One of the other letters that I received was from a woman of 67 whose husband is 72. They have worked hard all their lives and are proud of the way that they brought up their children. They know, however, that, life expectancy being what it is, one or both of them may eventually need long-term care: and they know what the costs will be. They also know what the effects will be on their children; no doubt they will be supportive, but this couple are worried, with fees running at between £300 and £500 a week, that they may outlive any insurance policy that they have. It is not very nice for such people to feel that they may become a burden on their children, who in turn might begin to wish that they would "move over". The family's assets would certainly be endangered.
The lady writes in her letter that everyone says that she should be insured, but she wonders with whom to insure. It is one thing to know that any money not used up will be paid into the health service; it is quite another to think of a private company benefiting if people die before they need the care. Those problems face many of our constituents, who are worried about losing the free care in the health service for which they have paid but which has been taken away over the past 15 years.

Mr. Wicks: I thank my hon. Friend. He reminds us that the goalposts have been moved, partly by the Government. Once upon a time, many people spent their final months, when they were ill, in cottage hospitals. Now, increasingly, although we know more about the impact of the wider environment on health care, our national health service is—paradoxically—being encouraged to take an ever narrower view of its responsibilities towards the sick.

Mr. Andrew Rowe (Mid-Kent): The goalposts have been moved, but not exactly in the way suggested. Owing to an extraordinary distortion in investment over the years, property has been regarded as by far the best place to put money. An enormous number of people have put almost all their assets into their homes.
Secondly, the age at which children can expect to inherit has risen so much that it has greatly changed many people's need to inherit. Both aspects are ingredients in a debate which, I entirely agree, we desperately need to hold, because this is an important subject.

Mr. Wicks: I thank the hon. Gentleman. By an historical fluke, inheritance now affects a much greater proportion of the population than it did even 30 years ago—at the very time when long-term care has become much more important. That can set up some delicate problems between the generations.
My hon. Friend the Member for Birkenhead (Mr. Field) is keen on examining the correlation between the social security system and behaviour—how some policies

promote bad behaviour and others, one hopes, promote good. While some people, through no fault of their own, cannot accumulate assets, others who can, encouraged by the Government and indeed by all parties, own their own homes, or save and invest. It is therefore quite wrong that they should lose all those assets during the last few years of their lives, and watch them being swallowed up simply because they did the right thing and behaved in an economically responsible way.
Our political parties are turning their attention to this issue now: we are going to hear far more about it in future. One option relates to the social security system, but I must not get sidetracked into a wider debate about long-term care. My thesis is that there will inevitably be new demands on the system in future, so it behoves us to take a radical look at how we spend our social security pound. The needs of families with children, although hardly new, will be discussed much more in the coming months. We are increasingly aware that, in middle England—to use that over-worked phrase—many two-parent families who are not near the poverty line are struggling to bring up children. Increasingly, the costs of children go into the teens, into the university years, yet we are expecting families to pay those costs with less support from the state.
It is not surprising that people elsewhere in Europe are very worried about low birth rates. It is not surprising that European men, but particularly European women, are finding it too expensive to have babies, which is why on average the birth rate in the European Union nations is now as low as 1.5 or 1.6. In the early 1970s, it was 2.5 or 2.6—that is one child fewer because of the dramatic decline in birth rates. That has come about partly because the women of Europe—less so the women of Britain, where our birth rate is slightly higher—are discovering that it is very expensive to have children. Increasingly, Governments—I know that this Government are doing it in private—are looking at how they can enhance the economic well-being of such families.
If we want to turn again, so many years after Eleanor Rathbone, to develop a new partnership between the family and the state, that would put added pressures on Government expenditure on social security. Yet social security is already at record levels. Who would have believed 16 years ago—those foolish enough to believe the rhetoric that public spending was going to come tumbling down and that the social security budget would be constrained—that a Secretary of State for Social Security from the new right would be presiding over record levels of public spending in his Department? That is something that will tease the historians in future.
I believe that there is scope for a radical restructuring of the social security budget. I am not convinced—it would be worrying if one were—by the public expenditure tables and accounts that every social security pound is being spent effectively on what the House would regard as sensible social security objectives. Spending is out of kilter. I shall give three examples.
My first concerns housing benefit. It is quite extraordinary that the social security programme is so way out of control. Let us remind ourselves of the figures for rent allowances. In 1994–95, we are already spending £4.7 billion on rent allowances. By 2000–01, it will increase to a staggering £8.1 billion. It is quite extraordinary that we are spending that amount on housing benefit. If I, and, indeed, the House, could be convinced that that was


sensible social security and housing policy, that would be one thing, but I am not so convinced. The Department of Social Security has been a victim of a housing policy that has neglected the idea of subsidising and encouraging bricks and mortar, and it has, through a means-tested system, with all the problems of the poverty trap that that occasions, decided to subsidise the individual. That has been a green light for the exploitative landlord.
In my advice surgery some two months ago, although he did not have an appointment, a gentleman rang to say, "I must see you as my MP." He came in with a henchman and said that his problem as the local landlord—a well-known landlord—was that he was no longer getting the money through from Croydon council as quickly as he had in the past. I said, "What do you mean? The housing benefit does not belong to you." He said, "Yes, but I always get my tenants to sign an agreement that the money will come direct to me." I told him that it should not be like that. His complaint was that the council was tightening up and toughening up a bit, was doing some checks and as a result he was not getting his cheques through on time. He was seeking my representations on that.
I do not believe that the taxpayer supports a housing benefit system that encourages inflated rents, and which in this particular case—it cannot be an exception— involves a cheque going from the public purse straight to the new Rachman landlords of the 1990s, who have been encouraged by the Government's policy.

Mr. Frank Field: Those cheques are not going only to the landlord, of whatever kind, as they are often for fictitious tenants.

Mr. Wicks: Indeed, and we have already explored the way in which the Government, despite their annual excitement with the sea air at Tory party conferences, have, in effect, been soft on fraud. There is no doubt about that.

Mr. Lilley: I am grateful to the hon. Gentleman for giving way, and he is making a thoughtful contribution. This specific issue has featured in a number of contributions. Housing benefit is the one benefit that is handled by local authorities. It was not until the Conservative Government introduced incentives for local authorities to crack down on fraud, and penalties when they do not, that they began to take the issue seriously, as they are now doing. I trust that the hon. Gentleman will also welcome the measures that we are taking to give tenants a stake in getting rents down on above-average rented properties from 2 January next year.

Mr. Wicks: Because of Government policy, there is a massive housing benefit system, administered by local authorities. We heard a well-earned tribute to those London Labour councils that are not just talking about fraud, because talk comes easy, but are being tough on fraud. Given the Secretary of State's keen interest in this, will he take the opportunity now—I am happy to give way again—to assure us that local authorities will be able to employ the staff to be tough on fraud in the future?

Mr. Lilley: I can certainly give that assurance. Indeed, they are required to do so. It was the Conservative

Government who provided the computer system for 24 London boroughs to co-operate together in combating fraud in London.

Mr. Wicks: I am encouraged to hear that, but it contrasts rather sharply with some of the evidence that the Select Committee on Social Security is hearing from the Secretary of State's offices. On the one hand we hear evidence that every fraud officer saves the taxpayer a substantial amount of money; on the other we are told that the Benefits Agency is not able to employ more fraud staff because of some extraordinary constraints. The economics needs to be looked at. The rapidly increasing amounts that are spent on housing benefit neither enhance true social security nor represent sensible housing policy.
Let me move on to another example. Hon. Members have made reference to family credit. I remember when Keith Joseph introduced family income supplement in the House. I was not here, but read about it as a student of social policy. I recall that the cost was some £4 million or £6 million in the first year or so. I do not think that he would have ever dared imagine that spending on family credit would be heading toward £2 billion in a few years' time. We have stumbled into a hole, an expensive new social security policy that is about subsidising the exploitative employer. We cannot easily persuade our constituents as taxpayers that the social security pound should be spent on subsidising low wages.
There is a clear difference between the political parties. Our arguments for a decent employment policy and a minimum wage are mainly about justice and the fairness of the case, but they are also about using social security pounds effectively. If social security pounds are going to be scarce in the future, as they will be under any Government, it is absurd that we are developing new initiatives to introduce social security programmes for single and childless couples in recognition of low wages.
Another paradox of new right politics is that the belief that we should not intervene economically and in the labour market, and certainly not make employers pay decent minimum wages, means that the state, commanded by the new right, has to intervene socially through the social security system in a massive way which no Labour Government would ever have dreamed of doing. Soon, almost £2 billion will be spent on family credit because of Britain's low wage policy.
The third example is income support. Beveridge envisaged national assistance, later supplementary benefit, simply as a safety net. There was to be a national insurance framework and, if people fell through that, for a period of weeks or months they would receive national assistance. Income support has now become in part a major and often long-term social security programme to support one-parent families. Life on income support is a grim life for such families. I do not believe, as saloon bar homily would have us believe, that income support provides a good standard of living, a life of Riley. It provides a terrible standard of living for those mothers and their children, yet, this day, seven out of 10 one-parent families are dependent on income support. The Government have never said that one of their social security objectives is to use income support in that way. It has happened partly because Britain has failed to develop a decent family policy.
We are having to spend increasing amounts of different social security benefits on what is essentially, yet implicitly, an early retirement programme. Increasingly,


many adults, particularly men, are thrown out of the labour market in their 50s. They then have to get by on invalidity benefit or income support with no prospect of work, waiting for their retirement pension. We are now spending substantial amounts of money on that, and again that is a misuse of social security policy.
We need to liberate the language of social security from social security jargon. The issue is how we promote true social security in Britain. That is an important question when a feel-good factor is absent because there is a feel-insecure factor. If one is concerned about social security, it should not be confused with social security benefits. One starts not with state benefits but with the foundations of social security in a society. The two crucial ones are employment and a strong family.
Employment has to be the major social security policy. If employment prospects are wrecked and worklessness encouraged, social insecurity is promoted. I mentioned the men thrown out of the labour market. Let me give a statistic because, unlike other hon. Members, I believe that statistics should promote good argument. At present, one in three men aged between 55 and 59—not the five years before retirement, but earlier than that—are not in work. Only two in three are in employment. Yet we have futile debates in the House about whether the retirement age should be 60, 63 or 65, as if that had meaning for the vast proportion of our people. One in three of those men are out of work. A minority of that group are technically unemployed, the others are called economically inactive.
If some of the economically inactive are new lottery winners, good luck to them. Frankly, new lottery winners will need a good deal of luck if the lottery prize is not to destroy their lives, but most of them are people who have either had to take redundancy packages or have been forced out of work. What we have seen is the rise of the inactive society in Britain. Because of the failure to move back towards full employment, simply too many of our citizens are economically inactive. That is bad news for them and for their families—most do not want it—but it is also bad news for the economy and the social security budget.
I bring my remarks to a conclusion. [Interruption.] I welcome the encouragement of the Opposition Whip, who I know would like me to go on longer, but I will not. I shall disappoint him as usual. Never please the Whips all the time.
The role of the Department of Social Security in the future is as a promoter of social security in the wider sense at which I have hinted. The Department of Social Security should not just be obsessed with state benefits. It should ask what are the trends in our society that make for social insecurity and what is the role of Government in promoting social security. The great failure to develop a family policy in Britain is a classic example. The rise of the single, unmarried mother is consuming more and more of the social security budget. Who in Government is taking hold of that issue and asking what are the preventative policies? [Interruption.] Apparently the Minister of State is. If so, he must be less silent on the issue. Who is asking what can be done about that trend, what are the implications for education in schools and for family planning, and what are the wider implications?
One could say that that is not the job of the Department of Social Security. The problem is that it is no one's job. In the old days, we had a thing called the joint approach to social policy. The Department of Social Security must become the major advocate for a joint approach to social security in the future. There is an absence now of clear social security objectives. If we could agree on clear objectives, we would see, as I hope that I have argued, that much of the billions of pounds of expenditure is now wasted; it is not used usefully.
I end with this point. At the moment, there is a correlation between the highest-ever levels of social security spending at a time of record levels of social insecurity. How we move away from that is the key challenge for the future.

Mr. David Shaw: I begin by congratulating two people without whom tonight's debate would not have been possible. First, I congratulate my right hon. Friend the Secretary of State on his Mais lecture speech— it seems like ages ago now, but I believe that it was two years ago—when he started the debate and we began to realise that there were real questions about the affordability of our social security system, especially if changes were not made.
Some of those changes have been made and some of them have been tough for the Government. One will not please all the people all the time if one is having to say that there will not be benefits for certain groups of people in the future, or that benefits will be curtailed or restrained. Those are tough decisions that must be taken sometimes if one is to run a country on a fair and just basis so that everyone has opportunities in the future.
I also congratulate the hon. Member for Birkenhead (Mr. Field) who chairs the Select Committee. He has given us a most enjoyable time discussing this particular subject. We have dealt with many subjects, but on this one we have been able to range widely. We have had much enjoyable debate. There have been times when the hon. Gentleman has been put on the far right of, dare I say, every member of the Committee, and there have been times when the hon. Gentleman has resumed his traditional political position and his position in the centre of the Committee. It has been stimulating. We are confident that the hon. Gentleman finds it easy to stand in for any member of the Committee who may be absent on occasion and put his point of view no matter at which end of the political spectrum that member of the Committee is. Therefore, we have been able to ensure that virtually every perspective has been discussed.
Having said that, I find it sad that our report should cost £28 while the Department's annual report costs £16.35, a total of £34.35. Most people on social security will not be able to buy those reports. It is ludicrous that something that affects so many millions of people cannot be brought into their households because they cannot afford it.
Parliament and the Department must consider how to make the reports more widely available. I note from parliamentary answers that no more than 1,000 copies are sometimes available to a population of 57 million. I do not imagine that every man, woman and child in the country will want to read the third report of the Select Committee on Social Security, but many millions might be interested. I have long promoted the Internet and the


information super-highway, and I hope that the Department, the Select Committee and the House as a whole will consider ways of providing a wider population with the reports by electronic means.
Our report started from the beginning, as it were, and asked, "Where is it all going?" Social security currently costs the country some £85 billion; the figure was heading towards £100 billion by the end of the decade before certain changes were made, and it may still touch that amount then. Social security spending amounts to nearly one third of public expenditure, and it has a habit of growing regardless. More people try to claim each year, and although many may cease to be eligible as a result of a change in their circumstances, claimants nevertheless form a never-ending group.
That causes problems. The main purpose of the original system was to help those in genuine need, but, given the fraud and abuse statistics, there is no doubt that it has failings. It does not always help people in genuine need; it provides money for households where the need does not exist, or is not as great as the claim suggests. We must do more to ensure that those in genuine need benefit.
We must also ensure that those in temporary need do not become permanent claimants. In many parts of the United States, two-year limits are being suggested in regard to certain types of benefit. Although such limits would clearly not be appropriate for, for instance, the disabled, they would be appropriate for other groups. We should provide incentives to encourage people to work, especially those on income support and unemployment-related benefits.
As the report points out, one of the main problems is that the social security bill has grown enormously as a proportion of gross domestic product. In the mid-1970s, when we last had a Labour Government, the proportion was 7.4 per cent.; today, even after many years of Conservative government, it is 12.6 per cent. I freely accept that that is an appalling state of affairs. The fact is that, regardless of which party has been in office, the social security bill has increased.
One good aspect of the way in which the bill has increased under a Conservative Government, however, is the fact that we are now putting nine times as much into benefits for the disabled as Labour did in 1979, the year in which we came to office. Some of that growth has benefited worthy recipients—genuine people whom we wanted to help. None the less, there is no doubt that some of the increase relates to less deserving groups.
The Joseph Rowntree Foundation and others produce reports suggesting that the growth in the social security bill can continue, but I question the validity of their assumptions. I do not believe that the vast bulk of people want the growth to continue; they recognise that we must invest in industry, technology and business, and that we cannot afford to put ever more money into social security. We must consider our international competitiveness.
We must also consider the way in which incentives operate. Many would say that, rather than being designed to help people to go to work, they are often designed to help them to stay away from work. Many would say that they are designed to help people to claim, rather than cease to claim. Many would say that they are designed to promote personal irresponsibility rather than personal responsibility. We should deal with such issues increasingly as the social security debate continues, as our Committee intends it to do.
In our report, we tried to take account of the possibility of gaining knowledge from other countries, in the context of our competitiveness in business, industry and public expenditure. If our expenditure is too great compared with that of other countries, our taxes and other disincentives will also be too great. We found that in Japan few if any single mothers are kept by the state: the family takes much more responsibility. We also found that the elderly are often cared for by their families, and do not impose a cost on the state.
There is no doubt that Sweden has a wonderful social security system, but the Swedes do not pay much for it. They have borrowed heavily from overseas, but they must pay the bills in the next century. There are doubts about whether they can afford to do so, as their national debt is now more than 100 per cent. of their national income. Ours is less than half our national income.
Many problems will arise in the next century, especially in relation to the elderly, owing to the demographic structures that now exist in many European countries. Reference is often made to the inter-generational contract, whereby one generation's contributions pay for the pensions of elderly people. That will be questioned in the future, however, simply because there has not been enough provision in the past for the pensions of the future. We must consider how we are to meet some of the commitments that have been made. My right hon. Friend the Secretary of State has already amended the state earnings-related pension scheme for purposes of affordability.
I should have liked to say more, but my main point is this. I hope that we shall consider ways in which the private sector can make a greater contribution in the future. Will contributory, non-contributory or income-related benefits point the way forward, or will the state have a smaller role? Will savings and the private sector provide more? I hope that my right hon. Friend the Secretary of State will come up with low-cost saving schemes in the next few years, and that the Chancellor will support them, so that many more people can have pensions in the future—especially those on low incomes.
I thank the hon. Member for Birkenhead for a report— much of it the result of unanimity—which, I hope, will take the social security debate into a new phase. I trust that we shall have many similar discussions in which we can explore one of the most important issues facing the nation in the next decade and beyond.

Mr. Donald Dewar: Like everyone else, I welcome the fact that this debate has taken place. It has not been over-well attended, but I congratulate the Ministers on the Front-Bench team. They are all loyally in their place, especially the new recruits on parade. The meaning of flexible labour and labour mobility has been given a new definition by the experiences of the Department of Social Security team in recent times. I thought that perhaps the Department was being used as a boot camp under the watchful eye of the Secretary of State for Social Security to put the younger raw material into some sort of shape.
At any event, I congratulate everyone who has attended the debate today and especially my hon. Friend the Member for Newham North-West (Mr. Banks)—who left just one minute ago but who has sat loyally throughout


the debate and who made a speech—because he is the only one who could not, in social security terms, be described as a usual suspect in our exchanges.
I seriously congratulate my hon. Friend the Member for Birkenhead (Mr. Field) and the Select Committee on Social Security. Its report is a valuable analysis. In conveniently packaged and presented form, it gathers together some important facts, and some opinions that, as he, I think, justifiably recorded, were held with remarkable vehemence by the various combatants during their evidence. The report must look forward because it is incomplete. It is a starting point and not a finishing point and it raises issues that are of fundamental importance.
Sustainability has become something of a buzz word for politicians in a number of sectors, but it is important as a defining factor in social security as well. There is an argument about what it means, and about whether there is a point of no return for social security expenditure and, if there is, where that point is reached. It is not possible to define it in that way as clearly there are burdens that are hard to bear and that one may feel one must bear as a Government and community. Clearly, the point of no return is a combination of the fiscal pain, the political will and the social judgment about the social casualties that may result if that burden is not shouldered.
All those problems interrelate and bear on each other. They cannot, of course, be reduced into one formula that can be applied irrespective of circumstances at any given time. I take the simple view that there is not a predetermined proportion of gross domestic product that one can say must never be breached, and where, when one has reached it—if one has brought expenditure down to it—one can rest in peace for ever and a day.
I was interested in the exchanges in our economic debate yesterday, when the Chief Secretary to the Treasury paid his touching tribute to the late R. A. Butler for having in 1955 brought public expenditure as a share of GDP down to 33.5 per cent. Then, in a gracious but inevitable anti-climax, he said that he did not think that he could achieve the same thing. Of course, he is right: he cannot achieve that and none of us could achieve that. It is wrong to conduct the debate in that way.
We must consider the problems. Some interesting points have been made about some of the new problems and difficulties that will emerge. We must try and balance them against the ways in which they can be tackled, both in the private and public sectors, because, of course, both have a role to play, and we must try to tackle them against the fiscal circumstances that the Government of the day face.
I am strongly in favour—it would be astonishing if I was not—of further information and having a debate that is based on public information and a well-informed public. It will, I hope, not discourage the Secretary of State to know that "The Growth of Social Security" is a document from which I probably quote more often than any other, because it does, especially if one reads the small print at the foot of the tables, give a fairer picture than is sometimes given of the position in which we find ourselves. I also often quote and find useful the document that the Department produced on international comparisons.
It is possible to argue that the European Union is spendthrift in its approach to social protection expenditure. That is a fair point to make, although I do not necessarily accept it, but it is still interesting and important to recognise, as someone mentioned earlier, that social protection expenditure as a percentage of GDP in this country is lower than in the European Union in general.
It is important that we do not forget the pressures that demographic factors will bring to bear, at least until 2030 to 2040, but it also worth remembering—to quote from paragraph 35 of the Select Committee on Social Security report—that
This country is forecast to move from having one of the most burdensome dependency ratios in 1980 to one of the least severe in 2040.
There is nothing permanent about these states, although it is important that those factors are always borne in mind. I am therefore strongly in favour of information. It helps me, so it is a selfish point, but I hope that it will help the debate as well.
I also appreciate—I do not have time and it would be wrong to run them through them in detail—the report's points about particular sectors of interest and pressure. Housing benefit has been mentioned. Of course housing benefit is a great growth area of expenditure and it is common ground between myself and the Secretary of State that, whether the policy was right or wrong, it can be traced back directly to Government policy.
Of course, I want the problems in relation to lone parents to be addressed, but I would state the problems, not in terms of a judgmental condemnation, and certainly not in terms of the scapegoating politics that appeared at least in some parts of Government some 18 months ago, but much more in terms of why, for example, over the years, the number of lone parents in work as a percentage of the total has dropped so substantially. Why has that happened? Given that it has happened, if we can understand why, does it help us to find out how we can get over the problem by offering opportunity to those in that group?
My hon. Friend the Member for Birkenhead has probably a more directive view of the social security system than me and possibly the Secretary of State, who has fairly said that he does not believe that one can necessarily change social habits by diktat or Government exhortation. I think that paragraph 57 of the report contains an interesting hint that may or may not represent the mind of the Committee. It remarks, in discussing the group of lone parents who have not had a long-standing relationship that has broken down to produce lone parenthood:
How to question the wisdom of this trend, while not blaming the single parents as a group, will call for great political skill. The Committee will be looking in its future sessions at ways by which their route to (never married) single parenthood can be closed.
I do not know what inference is to be drawn from "can be closed", but I await with some interest how that will be achieved. It is a phrase that has already been commented on to me by quite a number of interested groups, usually with some lack of favour, but of course we will wait to see what emerges at the end of the day.
In its preliminary description, the Committee is right to draw attention to the fact that, for example, some member of at least half of this country's households receives means-tested benefits. It is right to draw attention by


implication—and I am glad that the hon. Member for Dover (Mr. Shaw) and figures of great respectability in terms of their dryness have signed the report—to the fact that a contradiction may exist between the condemnation of the growth of means-tested benefits and the by-products of the introduction of, for example, jobseeker's allowance and, to a large degree, incapacity benefit. There are therefore many interesting and important matters to be considered.
Unfortunately, I do not have time to talk about fraud at any length. I have said already in other forums that it is unfortunate that it has taken us so long to get down to the interesting and important job of trying to define what fraud consists of. The Public Accounts Committee considered that problem in its 58th report published on 27 October 1993. At that time, we were told that efforts would be made for the first time to define the types of fraud. It has happened only now and it is a little belated, but from it some interesting points flow.
I was slightly surprised to discover that the front-line attack on fraud would come from home visits. I endorse the point that, as some of my hon. Friends said, if there are to be home visits, they should be ensuring not only that fraud and abuse do not exist, but, at the same time, that proper entitlement that has not been taken up is taken up.
There should be a double purpose for home visits, but I cannot help saying to the Secretary of State that, from contact with the Benefits Agency, my understanding, and I may be wrong, is that, over recent years, home visits have positively disappeared as a result of Government policy. It is a little strange that we are now told that they are to be revived because they are an essential way of fighting fraud. The best thing that we can deduce from that is that fundamental errors have been made in the past.

Mr. Corbyn: Will my hon. Friend give way?

Mr. Dewar: If my hon. Friend will forgive me, I am under pressure and I have given an undertaking to allow the Secretary of State some time to reply.
If the findings of the survey on fraud are accurate, in that only about 12 or 13 per cent. of the total fraud loss came from impersonation, forgery or the stealing of order books and giros—I do not believe that my hon. Friend the Member for Birkenhead would accept that, judging by his passage on organised fraud—it puts a question mark against the savings that the Secretary of State expects to achieve with his benefit payment cards system. The vast majority of the fraud identified involves people who are working and claiming what they are not entitled to or people who pretend to be single when they are in fact cohabiting. Those things will not be dealt with by the benefit payment cards system.
I am not taking a hard line on this but, given that the vast majority of fraud will not be touched by that system, the expected saving from the 19 million cards that are to be issued, at an initial cost of £135 million and an estimated running cost of £77 million, could usefully be reassessed.
I am sorry that my speech has to be so brief, but perhaps we can find another forum in which we can discuss this. It would be helpful if the Minister could say a word or two about a subject raised in the report, which provoked—if that is the right word—the Committee's visit to Switzerland. I am talking about the suggestion about localisation which followed the Mais lecture.
I remember the arguments about that and I thought that they had been laid to rest, particularly the arguments about different levels of benefit in different parts of the country. It was raised again on 9 July in The Independent on Sunday. It was a prominent story entitled:
Tories plan 'regional dole rates'".
It said that the cost of living in London is 17 per cent. higher than the national average, and that in Newcastle it is 12 per cent. lower. It suggested that the Secretary of State was considering whether that differential should be reflected in the rate of unemployment and other benefits.
I understood that that was not on the Secretary of State's agenda, but it would be worth hearing that from him again. It is unusual for a story such as that to appear without at least some prompting—[Interruption.] Well, the Secretary of State can deal with the matter quickly. In the original Mais lecture, the Secretary of State said:
It is harder to mobilise local pride"—
that is, under the present system—
to generate positive alternatives to welfare dependence.
Although I approve of the sentiment that we want to end welfare dependence, given the recurrence of the story, it might look as if that principle still lives. If it does, it should be the subject of an important debate. It would be helpful if the Secretary of State could say a word or two about it.
I am sure that the House will believe me when I say that I would like to have covered many other things. The Committee's report is descriptive, not prescriptive. It draws attention to the framework for the future and for a continuing debate, which I welcome. There is a long way to go.
I was interested in paragraph 101, which neatly sets out the future work pattern for the Committee and answers some of the questions with which we are familiar—by "we", I mean those of us who have read the latest book by my hon. Friend the Member for Birkenhead, "Making Welfare Work". That book gives a hint about the future of the social insurance principle and so on. It outlines what my hon. Friend thinks should be the future shape of events. It will be interesting to see whether he can carry his Committee down that road as things unfold. Although he expresses his belief in the social insurance principle in a much stiffer way, its general outline is very much in line with what was said by the Commission on Social Justice.
I recognise that there is great public and political anxiety about where we are going. I may be wrong, but I imagine that the Secretary of State will be saying a word about the Labour party's position. He is not a man who can always resist temptation and I believe that I am safe in that assumption. The Labour party is in hot water with the Secretary of State because it persistently refuses to live up to the caricature that he loves to think is alive and well. The right hon. Gentleman is learning the hard and painful way that it will not sit up to be shot at just to please the Secretary of State.
The Secretary of State intervened briefly to suggest that the Labour party was in some way being unreasonable by continuing to stress that work should be worth while and that people should not find it financially advantageous to remain on benefit or give up work to remain on benefit. If he thinks that that is unreasonable, he must get used to that sort of unreason from the Labour party. I believe that that is a common-sense approach and that it is right for the future of the welfare system and for those who, at least on a temporary basis, have to use it.
We shall continue to argue a responsible approach based upon social need and a system which we hope will reward those who take up the opportunity that it offers while protecting families, children and the vulnerable.
A number of detailed plans have already been unveiled on welfare into work, and more will follow. The argument is still to unwind, but the general approach set out by myself, my right hon. Friend the Leader of the Opposition and others is right. The application will be different from that which is emerging in Government policy. However, we all believe that that is a matter for the electorate to settle, and on that basis I watch future developments with some confidence.

The Secretary of State for Social Security (Mr. Peter Lilley): This has been an interesting debate and the standard of speeches, notably—as one would expect— from members of the Select Committee, has been high. Speeches have been made by the hon. Member for Birkenhead (Mr. Field), the Chairman of the Committee, by the hon. Member for Croydon, North-West (Mr. Wicks) and by my hon. Friend the Member for Dover (Mr. Shaw).
There have been some nostalgic speeches from old Labour in the shape of the hon. Members for Newham, North-West (Mr. Banks) and for Islington, North (Mr. Corbyn). There was the customary elegant speech from the hon. Member for Glasgow, Garscadden (Mr. Dewar). With his characteristic courtesy, he curtailed his remarks so that I would have time to reply. I am grateful to him and the least I can do is respond to his specific question about localisation and the reports in the newspapers.
The hon. Gentleman expressed the belief that, when something appears in the newspapers, it might automatically have some foundation. I can assure him that that has not been my experience. I do not know the origin of the story, but the hon. Gentleman is correct: when I talk about the proposition that, whenever we make a change, we should see whether there is any scope for localisation of the delivery and handling of the benefit, I am not thinking in regional terms or of differences in regional rates. The regional variations in living costs to which the article referred represent mainly the difference in housing costs. The system already reflects that difference through the fact that housing benefit is related to the level of rents in each area.
I am looking much more to the type of changes that we have introduced on a large scale, through community care, and on a smaller scale, through the changes that I have announced in housing benefit that give greater discretion to local authorities in the handling of that benefit from January next year.
I particularly welcome the Committee's report on the review of social security expenditure. That report and much of today's debate show how dramatically views on the reform of social security have changed since I called for a national debate in my Mais lecture two years ago. At that time, there was a widespread view that all that our system required was a removal of any restraints on higher spending. In his report "The Future of Welfare—A guide to the Debate", the Labour academic John Hills blithely suggested that there would be nothing wrong, in the long

term, with spending an additional 5 per cent. of gross domestic product on social security. By contrast, in this report, a Labour-chaired Select Committee now accepts that the
growth of Social Security spending is a cause for concern.
I recognise that the more realistic position taken by the Committee owes a lot to the hon. Member for Birkenhead, who is almost the only Labour Member who is prepared to face the facts. The very fertility of his ideas should shame his Front-Bench colleagues out of their reluctance to come up with some new policy ideas. To be fair, there were some hints from the hon. Member for Garscadden that they would be more forthcoming in future. I welcome that.
My medium-term objective when I announced the review of social security spending was not to cut spending, but to stop it outstripping the nation's ability to pay. As I never tire of pointing out, on average, just financing social security costs every working person almost £15 every working day. The cost was set to grow faster than gross domestic product, as it had been doing. Reform obviously takes time. As the hon. Member for Birkenhead said in his recent book:
changing the social security budget can be compared to navigating a great oil tanker … once a decision is taken it is a full three miles before any further impact can be made on the direction of the ship.
The hon. Gentleman granted himself a rather generous 20-year horizon for his programme for reform of the welfare state.
Reform takes time because most change requires legislation. If, as I usually prefer, changes affect only new claimants, their impact takes time to build up. Nevertheless, the changes that have already been announced should reduce the growth of spending by £4 billion a year by the end of the century and by more than three times as much in the longer term. As it happens, growth in social security spending in real terms during my first three years—which the hon. Member for Birkenhead suggested marked a period of failure—has been less than the underlying rate of 3.3 per cent. a year, although I accept that that is as much to do with the economic recovery as to do with the initial impact of my reforms, which will take a considerable time to build up.
The real measure of success against which I wish to be judged will be the reduction in the underlying rate of growth in social security. The measures that I have announced should cut the rate from 3.3 per cent. a year faster than inflation to just 1.3 per cent. a year over the next three years, settling at about 2 per cent. thereafter. I do not pretend that that is necessarily enough, but it does mean that the share of GDP taken by social security, which has almost trebled since the war, should decline gently henceforth.
If Opposition Members complain that spending is still growing too rapidly, they should remember that the Labour party has opposed almost every reform that I have introduced. In effect, the Opposition are telling taxpayers that they want them to cough up the best part of £4 billion a year extra during the next Parliament and £14 billion a year extra in the long term—and that is before implementing any of their, I regret to say, still profligate spending plans.
The Select Committee was right to recognise that the growth of social security spending is a matter of concern not just because of the tax burden it imposes on people, but because it reflects a growth in welfare dependency. I


hope that all of us would prefer people not to be dependent on benefit, but to be self-sufficient. The report illustrates the extent of dependency with the claim, which I am happy to say is mistaken, that half of all households contain someone on income-related benefits. That is incorrect. Some 27 per cent. of all benefit units contain someone on income-related benefits and about 30 per cent. of households do. That is still too high, but it is well short of the 50 per cent. suggested in the report.

Mr. Frank Field: The right hon. Gentleman should convey that view to the Prime Minister, who used those figures in an article in The Daily Telegraph the day before his re-election as party leader.

Mr. Lilley: I have a feeling that my right hon. Friend the Prime Minister was generously quoting the hon. Gentleman, thinking that his figure had been audited. I am happy to put the record straight.
I want to take this opportunity to address a specific issue raised by the hon. Member for Birkenhead in his recent book, which was mentioned in the Select Committee report. The book "Making Welfare Work" is, like everything the hon. Gentleman writes, full of erudition, fascinating insight and interesting analysis and I agree with much of it, but in the final section he makes a number of assertions, as he did in his speech today, about the role of means-tested and contributory benefits which I venture to suggest are mistaken.
The hon. Gentleman states that the Government have pursued a policy of increasing the number of people on means-tested benefits at the expense of contributory benefits. I do not think that that was ever a deliberate policy of this Government—or, indeed, of previous Governments of most complexions, as there has been an increase in the number of people on means-tested benefits over a long period.
The hon. Gentleman knows that that growth primarily reflects three things—first, the growth in lone parents, which is the largest single cause of the increase, and he does not suggest that that could be replaced by contributory benefits; secondly, the impact of the earnings dispersion affecting lower-skilled workers, a subject with which I have detained the House frequently and which I spelt out at some length in my Ulster lecture; and, thirdly, the transfer of support for housing from bricks and mortar to housing benefit, which is a means-tested benefit.
I have certainly not had a preference for extending means testing as an end in itself. In my Mais lecture I criticised those
proponents of means tested benefits who emphasise the fiscal savings but tend to ignore the disincentives on claimants.
I emphasised that other methods of targeting benefits were usually preferable to means testing. As a result, most of the reforms that I have made have involved such methods—changing or tightening up on conditions of entitlement other than people's financial means and making benefits, where appropriate, more conditional.
For example, my main changes involve equalising the age of entitlement to state pensions for men and women and ensuring that incapacity benefit goes to those genuinely incapable of work. Both remain contributory benefits. Only a tiny fraction of the £14 billion of savings announced so far—some £200 to £300 million—arises from the one reduction in the contributory element, that

which relates to the jobseeker's allowance. That will be offset by other measures that will reduce reliance on means-tested benefits.
I have explicitly ruled out means testing the state pension because that would penalise and discourage people who make additional provision for retirement. The contributory basic pension provides a platform on which people can—and, I am happy to say, increasingly do— build extra pension provision. Indeed, as a result of that, the proportion of pensioners who rely on income support has fallen since income support was introduced. That is an area in which there has been less reliance on a means-tested benefit.
The hon. Member for Birkenhead is not being remotely realistic when he suggests that contributory benefits could replace means-tested benefits for everyone who is out of work, thereby—as he implied—restoring incentives, eliminating fraud and saving money. In the first place, any form of unemployment benefit, whether contributory or not, must be means tested against earnings. Both unemployment benefit and income support are withdrawn if people earn more than a certain amount. Consequently, both contributory and non-contributory benefits for people who are out of work are equally likely to act as a disincentive to work and to create opportunity for fraud through working without declaring the work.
The suggestion that replacing income support and housing benefit by contributory benefits could save money is simply untenable. All of us who look realistically at social security know that there is a great prize to be gained if the budget can be curbed, but we also know that there is a political cost to be borne from those who have to forgo the money that we save.
We would all love to find a philosopher's stone that enabled us to spend less without creating losers. The hon. Member for Birkenhead seems to think that replacing means-tested benefits with contributory benefits is the stone. If it was, I should have no hesitation in stealing it from him, but, alas, there is no such thing in the sphere of social security as a philosopher's stone that would enable us to curb benefits without creating some losers.
A switch from means-tested to contributory benefits could save money only if some people who currently get means-tested benefits did not get the contributory benefit that replaced it. I am sure that the hon. Gentleman does not seriously propose to let people who have not been able to pay contributions starve or go without benefit. He plans to pay their contributions for them out of taxation so that they would still get benefits. It would be much like the present system, but with the names changed.
I will believe that the hon. Gentleman's system offers me the prospect of savings when he tells me who will be the losers from it. He is more forthcoming about who will be the winners. He implies that people who are not in work but excluded from benefit because they have a working spouse or sufficient savings to support themselves will be entitled to benefit. The cost of that would be very considerable indeed.
I hope that we can all agree that the best way to save money, and the way in which we are all obliged to seek to save money in the social security system, is by curbing fraud and abuse. I am glad that all hon. Members who have mentioned the subject have supported that view. The attack on fraud has always been a priority for me, and the Department has been increasingly successful in detecting


and stopping it. The figures that I announced this week show that some £717 million of fraud was detected—well over £60 million ahead of the target that we set ourselves.
A couple of hon. Members suggested that we are not being sufficiently vigorous on housing benefit fraud; it is expected that an additional £170 million—double the savings last year—will be saved in the current year. That is in addition to the savings made by the Benefits Agency and is the result of the changes that we have introduced to incentivise local authorities to set about combating fraud in their areas. Many of them simply were not doing so before. In future, they will be penalised if they do not. They will be helped by the computer system that we have provided, initially for the London boroughs but which will possibly be extended nationwide, if it works, to help combat cross-border housing benefit fraud.
However, prevention is better than cure. We have been developing a strategy that is a quantum leap from a system based on detecting fraud that has already happened to one that prevents and deters it. In the past, we have been hamstrung by our ignorance of how much fraud there was and what sorts of fraud were going on. Unfortunately, those who defraud the system do not report to us. No one reports fraud as people report other crimes.
No other country has, up to now, found a means of measuring the amount of fraud. I have been wrestling with the problem since I came to the Department. During the past year or so, we have been carrying out pilot studies. We have tried to involve outside research bodies.
We have finally developed a system of benefit reviews which, I believe, represents a breakthrough, nationally and internationally, in providing us with a measure of fraud and a baseline against which we will be able to measure future success in preventing it. That, in turn, has enabled us to spell out our strategy and the three main methods that we are proposing in a programme of 20 different projects, details of which I have put in the Library.
First is the benefit payments card, which is designed, first and foremost, to stop abuse of the payments order book system. It will also contribute to the elimination of identity fraud, but the savings on abuse of the order book system—the giro system—will provide substantial savings that, alone, are sufficient to justify the change we are making.
The second method is more home visits and checks on people to ensure that they do not make a fraudulent or false claim initially and do not subsequently become false claimants through failure to report a change in circumstances which renders the original claim invalid. The third string to our bow is more data matching and the use of information technology so that we can identify false claims and focus our effort on areas where false claiming is greatest.
The programme that I have announced has generated a very positive response nationwide, as have the changes and reforms that I have introduced in the welfare state as a whole. Indeed, I found myself the recipient of rather unfamiliar praise from newspapers such as the Independent and the Evening Standard. That seems to have provoked the Leader of the Opposition into a speedy attempt to sing our song in another outbreak of karaoke conservatism, as I have labelled it in the past.
Hon. Members will recall that, last October, the Commission on Social Justice published its report. Most commentators rightly dismissed it as 400 pages of uncosted waffle, but the right hon. Member for Sedgefield (Mr. Blair) begged to differ. After all, it had been commissioned by his predecessor and was the product of almost three years work by 16 prominent Labour sympathisers. He described the report as
a remarkable piece of work … undoubtedly the most significant and comprehensive analysis of the welfare state since Beveridge … The Labour party",
he pledged,
will now discuss the proposals themselves.
Yesterday, the right hon. Member for Sedgefield gave another speech on welfare. He did not mention the commission or its proposals. Instead of 400 pages of uncosted waffled, it contained only 400 words of—hon. Members have guessed it—uncosted waffle.
The right hon. Gentleman went on to indulge in imitation—which, I am told, is the sincerest form of flattery—of my approach to the welfare problem. He first followed me by setting out six principles. He then tried to do so by aping Tory language, but Labour's approach has only three principles. The first is to mimic Tory rhetoric. The second is to oppose any policies that are actually consistent with that rhetoric, and the third is to avoid any commitment to specific policies of its own. In short, Labour's only consistent welfare policy is hypocrisy.
As the hon. Member for Birkenhead said, reform of the welfare state is becoming the central issue of the politics of our time. It is the key problem facing all Governments worldwide. It will be a key issue in the forthcoming general election, as it was in the major election upset in the United States. This debate has shown that we are winning the welfare debate. I believe that that bodes well for my party and for the country.

Mr. Frank Field: The debate has shown, at least to me—and this is a surprising finding—how limited is the Secretary of State's view of the impact of social security changes on people's character. While he may worry about new Labour, we clearly have no need to worry about old Toryism. I think that we will continue this debate on Monday.

Question deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of Estimates).

Class III, Vote 3

Animal Diseases (Prevention and Control)

[Relevant documents: Fifth Report from the Agriculture Committee of Session 1993–94, Health Controls on the Importation of Live Animals (House of Commons Paper No. 347–1), the Government's reply thereto, Cm. 2735 and the Ministry of Agriculture, Fisheries and Food and the Intervention Board Departmental Report 1995: The Government's Expenditure Plans 1995–96 to 1997–98, (Cm. 2803).]

Motion made, and Question proposed.
That a further sum, not exceeding £263,921,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for cash limited and demand led operational expenditure by the Ministry of Agriculture, Fisheries and Food to: promote food safety, take action against diseases with implications for human health, safeguard essential supplies in an emergency, and promote action to alleviate flooding and coastal erosion; to encourage action to reduce water and other pollution and by other measures to safeguard the aquatic environment including its fauna and flora, to improve the attractiveness and bio-diversity of the rural environment and protect the rural economy; implement MAFF's CAP obligations efficiently and seek a more economically rational CAP while avoiding discrimination against UK businesses (including expenditure on existing CAP measures and schemes), to create the conditions in which efficient and sustainable agriculture, fishing and food industries can flourish, take action against animal and plant diseases and pests, encourage high animal welfare standards; provide specialist support services and allocate resources where they are most needed; provide for some inter-agency payments and undertake research and development.—[Mrs. Browning.]

Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss vote 4. I should inform the House that Madam Speaker has selected the amendment in the name of the leader of the Liberal Democratic party.

Sir Jerry Wiggin: I am delighted to have this opportunity to debate issues raised by the Agriculture Committee's inquiry into health controls on the importation of live animals. I note that Madam Speaker has selected the amendment in the name of the Liberal Democrats, and I understand that the subject that they wish to raise is about the health of animals within the United Kingdom. I shall not, therefore, go down that road but shall simply deal with our report. I do not wish to minimise the importance of the other subject, which relates to tuberculosis in badgers. As my Committee will investigate the whole of the dairy industry, I have no doubt that we shall receive evidence from the west country on that emotive but important subject during the autumn when we take evidence.
When we set out to do this inquiry, we decided to concentrate on two separate subjects: first, the movement of live animals, particularly farm livestock, into the UK under the new single European market rules; and, secondly—the importance of this area became apparent to us—the rules concerning rabies, quarantine and the importation of pets, particularly dogs and cats. We were fortunate to be advised by Mr. Howard Rees, formerly chief veterinary officer with the Ministry of Agriculture,

Fisheries and Food, and the late Mr. Tony Crowley, formerly head of the MAFF rabies section, who had advised the channel tunnel company on rabies prevention. We were shocked to learn that, sadly, he had died shortly after our report was published.
Those who simply believe everything that they read in newspapers may think that our report was only about rabies. It was not. However, the interest in that matter is fully understandable so I shall deal with our findings on rabies and quarantine first. Before doing so, I quote the Government's response to our report as it relates to farm livestock. It says:
The Committee's investigation of this subject, including those incidents in 1993 linked to imported animals, is a valuable service to the public as it puts the disease threat firmly into perspective and refutes the more extreme and alarming predictions about imported disease made by some in the agriculture industry and the veterinary profession.
We approached the question of rabies in a similar fashion. We were open-minded, sought perspective and appropriate solutions, listened and made recommendations. I may not speak for the whole Committee, but it would not be unfair if I said that at the outset the majority of us felt that quarantine was absolutely necessary. The fact that we then unanimously agreed to move away from quarantine shows that we took evidence with great care. The result is perhaps all the more remarkable for the fact that our initial prejudices were moved.
The deep-seated concern—indeed, hatred, worry and fear—about rabies is well merited. Rabies is an extremely unpleasant disease. If no treatment is given, it results in a lengthy, horrible and painful death. Furthermore, the antidote to a dog bite in a country where dog rabies is endemic consisted of a series—more than 30—of extremely unpleasant injections straight into the intestine. So not only was it a frightening disease but the treatment was none too good, either.
MAFF has been spending some £750,000 a year on advertising the horrors of rabies in all ports, airports and some railway stations. It has been issuing leaflets about the dangers of rabies and a great culture of fear of the disease has been generated.
Let us examine the position as regards human beings. There are two sorts of rabies: fox rabies, which is endemic in Europe; and dog rabies, which is endemic in Africa, India, South America and elsewhere in the world. I have never met a Frenchman or German who worries about getting rabies. Our European neighbours do not regard the fact that some wildlife has rabies as a particularly frightening factor.
Moreover, science for human beings as well as for animals has moved on. I understand that, if one is bitten by a rabid dog in India today, provided that one receives the antidote within two to three days, one would have no problem in surviving. The antidote is now a series of injections—five or six—rather like tetanus, so it is not as frightening as it was. The official advice from doctors if one is travelling in those countries is that, unless one expects to be more than a week away from medical attention, there is no need to be vaccinated against rabies. So we must put the whole matter in context. The world has moved on, and medical science has changed.
Nothing that the Select Committee has recommended or would want to do would increase the chance of rabies entering the United Kingdom. We emphasise that point at


the beginning of our report and say that our recommendations would not endanger the desirable rabies-free status of these islands. I remind the House, however, that the Rabies (Importation of Dogs, Cats and Other Mammals) Order was passed in 1974 and is therefore more than 20 years old. As I said, science has moved on in the human and animal worlds and the current rules are now outdated and expensive. I shall say a word about animal welfare in a moment.
Our recommendations should provide protection at least equal to, and arguably better than, the present quarantine arrangements. We have recommended a belt-and-braces system whereby a pet cat or dog would be permanently identified by tattoo or implanted chip. It would be vaccinated and then tested to ensure that the vaccination had taken. In any event, we have recommended importation of cats and dogs only from Europe and countries where rabies is not endemic.
The present system has two great weaknesses. The first is cost. Various figures have been given to us, but it seems unlikely that six months' quarantine for a dog would cost less than £1,200 and it could be as much as £1,800 or £2,000. For a cat it would be less—£800 or £900. None the less, it means six months' confinement. We all know that smuggling goes on and I have some figures on that. However, the inducement now is to get over those expenses and there is a very positive financial advantage if one can smuggle an animal into the UK.
I shall now discuss animal welfare. My hon. Friend the Member for Thanet, North (Mr. Gale) is sitting behind me. He takes a strong interest in animal welfare matters. I would say to him and to the Royal Society for the Prevention of Cruelty to Animals that to lock up a domestic pet in strange surroundings for six months, if not cruel, is highly stressful. The figures show that a proportion of cats and dogs do die in quarantine, and it is probably accepted that that is frequently a result of the stress induced by being parted from their owners.
We recommended that animals would be allowed into the United Kingdom without quarantine only in certain circumstances. The animals must enter from another European Union state or a country that is recognised as being rabies-free and which carries out appropriate policies to maintain its rabies-free status. They should be permanently identified by a unique number, which should be marked as a tattoo or contained in an electronic microchip. They should have spent at least six months continuously in the approved country before becoming eligible to enter the United Kingdom. Thus, a dog that had come from India would have to pause elsewhere in the European Union for at least six months if it were to be eligible for the scheme, and there are very few cases of dogs carrying rabies for six months.
The animals would have to have been vaccinated with an approved inactivated rabies vaccine at the age of three months or older. About four months after vaccination, a blood test would have to be carried out by an approved laboratory to determine whether the animal is immune from rabies. The four months between vaccination and blood testing would act as a pseudo-quarantine period.
After being blood tested, animals can enter the UK within 12 months of the initial vaccination. If they travel frequently between the United Kingdom and approved countries, they must receive annual booster vaccinations

and travel within one month of such vaccinations being administered, and then only subject to a satisfactory blood test.
The pet owner would have to obtain an import licence from MAFF, specifying the port and time of entry into the UK, and the divisional veterinary officer responsible for the point of destination would have to be informed. Finally, the animal would have to be accompanied by a passport giving a record of its vaccinations and its health certification. That is a pretty demanding and onerous requirement—certainly more than we require of any human being that I know. If there was any failure to comply with such requirements, the animal would have to go into quarantine or be re-exported. We recommended that, at this stage, quarantine should be required in all other circumstances.
What are the risks? What are the real risks of a rabid dog entering the country? They are very slight. Since 1972, 100,000 dogs and 50,000 cats have been through the UK quarantine system, of which only two developed rabies—one dog from the United States and one dog from Zambia, countries which, under our proposals, would continue to be subject to quarantine.
It is worth bearing in mind the fact that, as I said earlier, the rabies in Europe—the strain adapted to foxes—is not nearly as threatening to human beings as dog-adapted "street" rabies in other parts of the world. Dogs and cats can contract fox-mediated rabies, but it would seem that they are unable to pass it on.
We have recommended a system similar to that introduced in Sweden. Sweden has been rabies-free since 1886. It has two borders, one with Norway and one with Finland, which are open borders. It has a high reputation for animal health. It wishes to remain rabies-free, yet it has adopted that system. Even more remarkable, when we went on our visit to Denmark, we found there a country with a 50 km open border with Germany, where there is endemic rabies, and not far away—and from time to time a rabid fox will cross into Denmark and cause trouble.
The Danes have gone much further than the Swedes; they have allowed importation of dogs from any country in the world, with a passport, a certificate of vaccinations but no double test. I doubt whether any country in the world relies more for its living on a clean health chit than the Danes do. Their main livelihood lies in dairy and pig products, and without a high reputation for health standards, Denmark would find it extremely difficult to make its living exporting, as it does, worldwide.
In addition, the prevalence of rabies in Europe is decreasing rapidly. The World Health Organisation report shows that, between 1989 and 1994, the annual number of cases of rabies in European Union member states fell from a peak of 8,509 to 1,582, and it continues to fall. That is entirely due to the European Union's oral vaccination programme, using inoculated baits for foxes. We were privileged to have a briefing on that matter. The original bait was chicken heads. The foxes thought that that was quite clever and used to collect them up, 15 or 20 at a time, so it was not the most economical method of vaccination. A new and more luscious bait was therefore devised which apparently produces in excess of 80 per cent. successfully vaccinated foxes. Once the amount of rabies in a fox population has dropped below a certain level, there are not enough host animals to sustain it, so that programme is proving extremely successful. I should


say that it was never our intention that we should import foxes or, for that matter, any other wildlife from the European Union.
The Standing Veterinary Committee in Brussels calculated that, if 1,000 unvaccinated dogs per year were picked randomly from the population and imported into the United Kingdom, it might be expected that a dog incubating rabies would be imported once every 1,250 years. If 5,000 dogs were imported randomly each year from Germany, which is the European Union country with the greatest incidence of rabies, only one animal every 31 years would be expected to be incubating rabies. With vaccination and blood testing, that already remote risk would be reduced even further.
We should consider what motive might drive someone to seek to bring in a rabid dog. Every pet owner wants their pet to be healthy. They spend money on inoculations; they will take it to the vet; they want it as their companion. If some malicious person wishes to introduce rabies into the country, they could have done so a long time ago illegally anyhow, so what are we defending against? The answer must be the cost and welfare considerations.
I have explained that the vaccine technology has changed since the Waterhouse report. The Waterhouse committee was set up after a case about 20 years ago. The modern vaccines were available in the late 60s and early 70s and even then quarantine was recommended, but nowadays there is a substantial smuggling problem. Like my right hon. Friend the Secretary of State for Social Security, who earlier said how difficult it was to find or quantify cases of social security fraud, I fear that we have no way of quantifying smuggling, but it is worth bearing in mind that, between 1985 and 1993, HM Customs and Excise dealt with 492 cases of illegal entry involving dogs and 273 involving cats—and I suggest that that is very much the tip of the iceberg. One does not have to go very far to find examples. Among our forces in Germany, one can hear a good deal of talk about how they might get over some of the little problems, such as the six months of quarantine and the cost involved.
We see the present system as a ludicrous and unnecessary waste of money. We believe that it is bad for animal welfare and distressing for the owners, and that it restricts freedom of movement. I read in an evening paper today that the Battersea dogs home spends £40,000 on advertisements about the problems associated with people turning their pets out at the beginning of their holidays, leaving them on the streets and abandoning them. Pets could go with their owners to Spain, Italy, France or wherever these people go. Much more importantly, the French, the Italians and the Spanish could bring their dogs here. I understand, although it is not mentioned in our report, that the barrier to bringing pets here is a serious inhibition to tourism. If we had the arrangements that we have in mind, people could bring their pets with them and it would be good for business.
The Government's response was that they were quite happy about our recommendations on farm livestock, presumably because they suited the Government's purposes. We remain extremely surprised, however, at the negative response to our recommendations on rabies. I am delighted to see my hon. Friend the Parliamentary Secretary in her place and I am sure that she will wind up with encouraging words.
She will recall that on many occasions we have argued strongly that Ministers, when taking advice on technical matters from their scientists, should do what their scientists tell them. We do not understand why the scientific advice that Ministers are being given on this subject is so at variance with the experience of countries such as Sweden and Denmark. I shall therefore press my hon. Friend to make her case clearly.
This week, the British Medical Association sounded off on the subject of rabies. There followed a series of statements in the association's report, mostly restricted to the basic principle that if we have not had rabies we should not change anything because the system has worked. Of course it has worked. We are simply saying that there is a better way to achieve the same objective. There is quite a piece in the BMA recommendations about foxes—I was a bit mystified by the BMA's apparent expertise on foxes—and the British Veterinary Association took a similar view. It just so happens that Mr. De Vile, who is president of the BVA, served on the BMA committee as well. Presumably his prejudices have been carried from one organisation to the other.

Sir Roger Moate: I think that I heard my hon. Friend say a moment ago that he recommended that the Government should accept scientific advice. Does my hon. Friend not cast the BMA and the British Veterinary Association as sources of good scientific advice? Why does he reject their advice?

Sir Jerry Wiggin: I certainly do not. However, if my hon. Friend studied the BMA report, he would find that there is nothing at all scientific about it. It is simply a statement of prejudicial facts, written on BMA paper. It is very irresponsible of such an organisation to produce statements based on prejudice and not on fact.

Mr. D. N. Campbell-Savours: Is it not the case that, if the hon. Member for Faversham (Sir R. Moate) had been on the Committee six months previously, he would agree with the hon. Gentleman today? He would have changed his mind too.

Sir Jerry Wiggin: I look forward to hearing what my hon. Friend the Member for Faversham (Sir R. Moate) has to say in a few moments.
When the Community passed the Balai directive, the United Kingdom found itself in a difficult position. Here was a directive which said that, if people complied with a series of precautions not dissimilar to those that we have suggested—although somewhat more stringent, I admit— so-called traded dogs and cats could come in and out of the United Kingdom without quarantine. In theory at least, that system has been working for a few months.
The conditions are so stringent that, I understand, the few dogs and cats to have tried it have mostly failed the tests. However, the fact is that the Government, advised by their scientists, are prepared to allow traded dogs and cats to come in and out, but are not prepared to allow this to be the case with pets. What is the difference? What is the difference in risk? Surely the Government are right to agree to the principle. In that case, it is quite illogical not to agree to its extension.
The international panel of experts on animal diseases— the Office Internationale des Epizooties—sees a system of vaccination and blood testing as a perfectly viable alternative to quarantine for rabies. Even the BMA, about


which I was not very polite just now, suggests only that quarantine should remain until additional requirements can be fulfilled. My Committee feels most strongly that the UK should move towards a more rational and appropriate means of protecting our rabies-free status.
I am delighted to see my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food on the Front Bench, and I welcome him to his new position. We look forward to having him in front of our Committee in due course. I hope that he has been listening with an open mind to this debate and that he will, in due course, study our report with care.
We are having to wait until other countries, such as Norway, Sweden and Denmark, have satisfied us that all their precautions work perfectly well. For a country of our size, that is a great pity. In a debate in the other place on 15 March, Earl Howe—then Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food—hinted that with effective enforcement, alternative systems could provide the same level of assurance as quarantine. That would be a welcome step forward in Government policy since the reply to our report was published. Incidentally, during that debate, of the nine Lords and Ladies who spoke, all except the Minister were in favour of our report and against quarantine.
To deal briefly with the subject of farm livestock, we found that there was considerable feeling about various problems which had arisen, especially in relation to warble fly. Imported animals had clearly been given fraudulent certificates or had simply not been properly inspected before being imported. We had a look to see whether the new arrangements, under the single market, were satisfactory. We considered foot and mouth disease, brucellosis, Newcastle disease, Aujeszky's disease and many others which cause farmers a great deal of concern.
Diseases in animals are detrimental to the animals themselves, to good husbandry and to the wealth of farmers. Disease threatens livelihoods and the survival of businesses. Some diseases are transmissible to humans, putting the health of farmers, farm workers and their families at risk. We in the United Kingdom have never taken lightly the diseases of farm animals, and nor should we. Our island status has allowed eradication of the worst livestock diseases and has prevented others from becoming established.
Our high animal health status has been achieved at great cost and we should not allow the Community's rules, or anybody else's, to reduce that status. Between 1983 and 1990, £38 million was spent on eradicating Aujeszky's disease, of which pig producers contributed £27 million. Indeed, I remember replying to an Adjournment debate on that subject and reminding farmers that, although we were happy for Aujeszky's disease to be eliminated, we did not see the Government contributing too much to that effort. As I have said, the farmers contributed most of the money and there has been a very successful campaign which must not be damaged.
We fully understand that the single market caused the farming community some concern. The new system of veterinary checks is very different, and there was considerable concern, especially in the case of cattle, that it might have been at fault. The Committee did not find that to have been the case, but we recognised that things had changed.
Under the previous system, importers applied for an import licence from MAFF and the animals were then certified by the vet in the country of origin. The certificate was then checked on arrival at the point of entry in the United Kingdom and the animals were held for a further 21 days as a precaution, particularly against foot and mouth disease.
Both those procedures have now changed. The European Union adopted an eradication scheme for foot and mouth and it is now free of that disease. The United Kingdom could no longer justify the 21-day holding period, and it was removed in 1992. As of January 1993, point of entry checks were abandoned in favour of spot checks and checking at the point of destination.
Under the new system, the Ministry of Agriculture, Fisheries and Food is notified of animals to be imported, the points of entry and journey plans via a Europewide ANIMO computer network. It was not working particularly well when we went to see it in operation, but the officers were managing very well with faxes and they seemed to know when and where the animals were coming from, so we were satisfied that all was in order.
The removal of the point-of-entry holding period for foot and mouth disease eliminated an economic barrier to the import of lower value cattle as dairy replacements. Livestock has been bought recently from countries such as Holland and France because it is cheaper than the rather higher class stock that is available in the United Kingdom. Between 1990 and 1993, the number of cattle imported from France and the Netherlands increased from 90 and 150 to about 6,200 and 5,500 respectively. With that increase in numbers came a heightened disease risk, which we accepted.
The Committee considered that the majority of problems were caused by the increased volume of imports and by the type of animals imported—particularly those originating from behind the former iron curtain. Some of the disease scares may not have been detected under the old system. That is particularly true of imported cattle infected with warble fly larvae and those vaccinated against foot and mouth disease, which contravenes the principles and rules of our scheme. We decided that there was no disease time bomb and we gave a general endorsement to the system, which was borne out by subsequent events.
The Committee was concerned that some aspects of the system needed fine-tuning. We urged the Government to ensure that the European Union devoted sufficient funds to the Community veterinary fund to allow the disease control and eradication programmes to operate effectively. There is a substantial problem with swine fever in Germany, and the Germans are very keen to give up their slaughter policy and return to inoculation and vaccination. That would be completely wrong, and it would undermine the purpose of the central programme.
We urged the Government to make clear representations to the European Commission about the need to consider and rapidly approve the additional trade guarantees which allow member states to impose conditions on imports where special circumstances apply. Perhaps more importantly, we suggested that there should be a one-week compulsory holding period for imported animals at the point of destination to allow the state veterinary service to conduct appropriate checks on health certificates. That point of destination could well be the


farm of ultimate destination, but the animals should be kept separate and examined. That is a common-sense precaution.
We also suggested that the European Union should instigate measures to assure itself that the standards of veterinary training and of the state veterinary services in all member states are of a uniformly high standard; that adequate penalties are applied to any veterinary surgeon who is found to have falsely certified an animal; and that certification procedures throughout the European Union are harmonised, with documentation in the languages of both the importing and the exporting countries.
It was very difficult to get the vets and Ministry officials to admit to the Committee that the training schemes for vets in Greece were not adequate, but I can tell the House that they are not. The European Union was wrong not to take a more open approach to the issue. It investigated the veterinary services in all member states and reported its conclusions to the state concerned, but it did not make the report available elsewhere. It is crucial to the operation of a health scheme that those who certify animals are trained to an adequate standard. We have the highest standards of qualifications and experience in this country and we should insist upon the same standards in our EU partner countries.
The Committee was grateful that the Government were in broad agreement with its main recommendations, but it would be helpful if the Parliamentary Secretary, my hon. Friend the Member for Tiverton (Mrs. Browning), could indicate what progress has been made in implementing the recommendations.
We suggested that stock imported into the United Kingdom should be marked with specially coloured tags and we found it difficult to understand why the Government failed to accept our recommendation. Their view was that the new animal identification system, which was introduced under directive 92/102/EEC and came into effect in the United Kingdom on 1 April 1995, would ensure that an animal's country of origin could be established. However, I am afraid that the Government have missed the point of the proposal. We wanted to ensure that an animal in a pen with a special coloured tag could be identified immediately as an imported animal. It should stand out as such, as occurs in other countries in the European Union. That was virtually the only recommendation in that part of the report with which the Government did not agree.
We welcome the fact that MAFF has relaunched the "Don't import disease" campaign. We hope that we set out the principle that those who buy stock abroad should ensure—if necessary at their own expense—that the stock is healthy before bringing it into the country. We would like to know more about the progress of Government efforts to persuade the EU to publish the full Bendixen/Dexter report on the quality and structure of veterinary services in member states, to which I have referred.
The Committee also dealt with problems with horses, birds and fish. Hon. Members will be interested to learn that yesterday MAFF appointed a new inspector of imported fish. While we welcome that move, there are many other problems to consider also. Caged birds continue to be smuggled into the country and the prices at which they are advertised for sale clearly show that the birds have not come through the normal importation

procedures. We are worried that bird smuggling will lead to the introduction of Newcastle disease, which could have a disastrous effect on our poultry industry.
I will not go into the details of spring viraemia of carp or viral haemorrhagic septicaemia and other such matters, as they are set out in the report. I am sure that my hon. Friend the Parliamentary Secretary will mention them in her winding-up speech.
We believe that the recommendations in our report, whether relating to the importation of farm animals or to protecting the United Kingdom from rabies, were based on a thorough assessment of the risks and that they constitute appropriate responses to the threat that is posed to the United Kingdom's high health status. We are disappointed at the Government's seemingly blinkered defence of the status quo with respect to rabies and quarantine and we hope that the new team will rethink the matter. The Government do not appear to dispute the facts on which our proposals are based, and we have detected a growing hint of acceptance in recent Government statements. Let us hope that that acceptance will grow a great deal more this evening.

Ms Jean Corston: As a member of the Agriculture Select Committee, I welcome the opportunity to contribute to the debate on our report entitled "Health Controls on the Importation of Live Animals". The inquiry took place because of the need to remove barriers in a single market, but I think that every member of the Select Committee was determined to ensure that we should not use that as an excuse for relaxing health controls when importing animals into the United Kingdom, because over the years we have achieved very high health standards, particularly with domestic pets and farm livestock.
I was particularly concerned about the vulnerability of fanners who purchase livestock from abroad, as it seems that they will receive only a warranty and an indemnity against purchasing a sick animal. I believe that such a warranty and indemnity would not be enforceable in law, and therefore not worth very much. In that context, holding periods for livestock and coloured ear tags to identify imported livestock would prove a useful protection for farmers. For example, the Danes use coloured ear tags on imported pigs, and if the Danes can do it, I see no reason why we should not do so.
As the Chairman of the Select Committee, the hon. Member for Weston-super-Mare (Sir J. Wiggin), said, a great deal of the Committee's time was spent examining the rabies question. I began the investigation absolutely convinced that rabies was right, that we ought to keep it— [HON. MEMBERS: "Quarantine."] That quarantine was right. I apologise, and I thank my hon. Friends for putting me right.
I was absolutely convinced that quarantine had protected this country against rabies—a disease that all of us find utterly horrifying—and that at all costs our report should conclude with the recommendation that quarantine should stay. I make no apology for being persuaded by the evidence that I was wrong. A system of vaccination with an inactivated virus followed by blood tests would be much more satisfactory than quarantine and would serve the needs of pet owners and the general population.
In living memory there have been two cases of rabies in dogs in this country: one in 1969 in Camberley and one in 1970 in Newmarket. Both dogs had been through quarantine and developed rabies subsequently. I notice that the British Medical Association report, to which reference has been made, says that quarantine, which was introduced in 1901, has been effective since 1971. If a dog develops rabies after quarantine, we should first consider that indication of its effectiveness.
The other thing that I did not know about rabies was that there are two kinds. The kind that most of us are terrified of—the image of the dog salivating—is dog rabies, which is endemic in parts of the world such as the Indian subcontinent and, primarily, the southern hemisphere in Africa. In Europe, fox rabies occurs. In that context, the fox vaccination programme in the European Union was one of the aspects of EU policy with which I was impressed. With fox rabies, the dog which is bitten, if a dog is ever bitten by a fox—it does not happen often— is called the end host. The dog almost never passes on the rabies.
To people who are concerned, shake their heads or look puzzled, I say that there is no difference between fox rabies in a dog or a cat and fox rabies in horses, sheep and cattle, because all mammals are susceptible, but that does not stop imports of farm livestock. Nobody suggests that we should not bring in horses, sheep or cattle or that they should all be locked up for six months to see whether they develop rabies, because we think that the risk is so negligible that it is not worth considering. Yet we say that precisely such rules should apply to domestic pets. That inconsistency of treatment between domestic pets and farm livestock was one of the first reasons why I became uneasy about quarantine.
It is important to remember that the last known death of a human from rabies in Europe was in 1928 in France, and that since then excellent vaccines have been developed against fox rabies and rabies in humans.
Between 1972 and 1993, a total of 150,720 dogs and cats went through quarantine, during which time there were only two cases of rabies: one of a dog imported from the United States of America and the other of a dog from Zambia. Both had dog rabies from countries where dog rabies was prevalent. There was not a single case from areas where fox rabies was prevalent. That leads me to conclude that, although the risk is minimal, we obviously want to guard against it, but with a better system than quarantine.
I consider quarantine a blunt instrument. It costs approximately £1,200 to quarantine a dog. I note that the BMA discounts the possibility of smuggling and says that there is only anecdotal evidence of it. It is not anecdotal. The Chairman of the Select Committee gave the figures of detected cases, which amount to about 100 a year. That is probably the tip of the iceberg, because travel between the European continent and Great Britain is now much easier. The volume of traffic has increased enormously because of the channel tunnel and cross-channel ferries, and opportunities for smuggling have grown tremendously.
Sweden, a country which I admire, has been free of rabies since 1886. I think that it is right to say that the Swedish are as concerned about their health and their protection from the risk of rabies as we are. The Select

Committee went to see the Swedish system in operation. It was launched on 1 May 1994, it involves vaccination and subsequent blood testing to ensure that a dog is rabies-free, and it seems to be virtually foolproof. Seeing that system in operation finally convinced me that it was the way forward for this country.
The Committee proposes a system which is better than quarantine. It involves microchipping or tattooing the dog or cat, vaccination with an inactivated vaccine, testing the blood for the effectiveness of the vaccine after four months and requiring that the animal is brought into the United Kingdom within a 12-month period with an import licence and an animal health passport.
As Select Committee members and people who are responsible for animal welfare and public health in this country, we want a better system and one that does not encourage smuggling. We have to set that, as I have said, in the context of the channel tunnel, the growth in ferry traffic and the fact that the single market provides for the free movement of workers. If people have a right to move between countries of the European Union for work, the question should then arise: what about those with domestic pets? How will those people behave in the face of Britain's quarantine system? That problem is not confined to service personnel; it affects many people's work, holidays and other situations to which I shall refer.
I congratulate the Ministry of Agriculture, Fisheries and Food on one achievement: it has had the most tremendous success in terrifying people about the risk of rabies. The placards showing the skull and crossbones at every port put the fear of God into everybody—they have certainly always terrified me, and were part of the reason why I thought that quarantine was a thoroughly good idea. During our inquiry, it was pointed out by a couple of experts from whom we took evidence that Britain was becoming the laughing stock in Europe on this issue, and I believe that that is true.
Although the risk might be minute and it is vital to have a safe and secure system, the issue of quarantine is important for certain groups of people. Recently, the House has been quite rightly concerned about civil rights for disabled persons. I ask hon. Members to stop and consider the case of guide-dog users. Guide-dog users cannot travel if they are British because if they leave the country with their dog they cannot bring it back until it has been quarantined for six months. That is ridiculous. There should be a system under which a dog can be protected from rabies, humans who have any contact with that dog can be protected from any risk and a blind person can enjoy foreign travel like the rest of us.
I have concluded that our policy on rabies is a little like the man who used to go round snapping his fingers all the time. Somebody finally asked him why he was doing it and he said that it was to keep elephants out of the country. When it was pointed out that there were not any elephants in the country, he said: "It just goes to show how effective it is." It seems ludicrous to suggest that a policy that keeps out dogs, the ineffectiveness of which was shown in 1969 and 1970, should not be replaced in the modern world with a system that, with the free movement of people, provides for the protection of animals and public health.

Sir Roger Moate: The great privilege of serving on the Agriculture Select Committee was bestowed on me only a few months ago, so I carry neither blame nor credit for the report.
Throughout my political career, however that might be described, I have always been sceptical about Select Committees, but I have come to appreciate the quality and quantity of the work undertaken by the Select Committee on which I serve. I was most impressed by the commitment shown by its members of all parties and by their non-partisan approach to matters that are examined in the Committee's latest report.
I was also impressed by the professionalism of the staff in respect of matters of extreme technical difficulty and physical sensitivity. The work done by my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) in conducting the affairs of a difficult lot with great humour, diligence and application was first-class. As with the report, a tremendous amount of high-quality work is done by the Committee and I was agreeably surprised. I hope that I may enjoy continuing to serve the Committee for some years.
The report's introduction emphasises how seriously the Committee's latest and other investigations are taken. The report is impressive, but I do not agree with its conclusions. Incidentally, although the report required a visit to Scandinavia, we also visited the quarantine station at Heathrow airport, quarantine kennels near Deal, a farm near Rugby, the Folkestone terminal and, inevitably, Brussels. I place that on record for the benefit of critics outside the House, because that is hardly a Cook's tour of exotic destinations.
One criticism I have of Select Committee reports is that their conclusions are too general, too wordy and insufficiently politically challenging. In this case, the proposal to change quarantine policy is specific, clear and challenging—and in my view, totally wrong. I agree with the Government's response and look forward to hearing the reply of my hon. Friend the Minister. I welcome the Government's determination to maintain the existing quarantine system, and I am glad that policy is strongly supported in the powerful paper from the British Medical Association that was circulated to Members of Parliament earlier this week.
I do not ignore for one moment the powerful voices in favour of change. I read the Select Committee and British Medical Association reports thoroughly, but I can claim to have read the evidence only to the extent that the Chancellor of the Exchequer read the Maastricht treaty. However, it is an impressive dossier. I read carefully the impressive evidence from pet owners, who pay the price financially and emotionally. The stress of enforced separation for six months, or for ever in many cases, is a real factor that I do not disguise.
The hon. Member for Bristol, East (Ms Corston) referred to the single market argument. The Conservative ex-MEP for East Kent, Christopher Jackson, presented a powerful report on the subject from the point of view of the European Parliament. I do not underestimate the dramatic progress made in Europe in controlling rabies and its elimination in many parts of the continent—a remarkable change in the life of our nation and of the continent. However, the European Union is enlarging rapidly to the east and will no doubt do so to the south, to the Mediterranean.
In a few years' time, the EU could have twice the number of member states. It would be a brave man or woman who asserted that those new frontiers will be as rabies-proof as the frontiers of the EU's present members. One welcomes the optimism that rabies might be eradicated in the EU by the turn of the century, but there are overwhelming arguments against the likelihood of that happening.
Britain can be thankful that it is free of rabies, while Europe can rejoice that the disease is being defeated on the continent. We must not, however, lose sight of the horrifying nature of the disease. My hon. Friend the Member for Weston-super-Mare almost struck a note of complacency with regard to the nature of the disease elsewhere in the world. He said that the world has moved on, but the good research paper produced by the Library states:
Worldwide, around 6.5 million people receive treatment every year after being bitten or scratched by dogs, and 33,000 people die each year from dog rabies.
As the hon. Member for Bristol, East said, most of those deaths occur in India. My point is that the world has not moved on that much.
The hon. Lady said also that she was frightened by the skull and crossbones posters at ports. That is a good thing, because—even if the Select Committee's recommendations are accepted—the threat of rabies will remain, from all the non-approved countries in other parts of the world. I hope that small and large ports throughout the country would still display skull and crossbones posters to stop the entry of rabid animals from the many countries that will not become rabies-free.

Ms Corston: The hon. Gentleman is aware that the Select Committee recommended that quarantine should stay in the countries to which he referred.

Sir Roger Moate: That was my point, so posters would need to remain and we would have to maintain justified public fear of rabies returning from other parts of the world.
My hon. Friend the Member for Weston-super-Mare referred to the horrifying nature of rabies. Anyone who doubts its effects will find in the Library paper a couple of pages that make gruesome reading. It is easy to understand why we are so concerned to ensure that there is not the smallest risk of rabies being reintroduced into this country.
I have often thought that our island status has given us the best of all worlds. It makes us a strong nation state and allows us to be one of the most international outward-looking nations on Earth. At the same time, our island status allows us to be insular when that happens to suit our purpose, which has proved a superbly successful bastion against rabies in particular. The quarantine system has not only worked remarkably well but has given the public crucial confidence—the belief that we are and can remain a rabies-free nation. That confidence is a priceless asset. If there were at any time a revival of the fear of rabies, which could be generated by fox rabies as much as dog rabies, there would be serious consequences.
It is proposed to remove that bastion and end the quarantine system and to replace it with a system of pet passports, chips and tattoos.

Ms Corston: Vaccines.

Sir Roger Moate: Yes, the pet passport is a record of those. I do not want to trivialise these techniques, especially as they are being used by other nations.

Sir Jerry Wiggin: My hon. Friend is perfectly right about the fear in people's minds. He is a well travelled man. Would he say that his friends in France and Germany ever talk about this matter, or worry about it, or take any medical precautions? The fact is that they do not.

Sir Roger Moate: I suspect that the issue would seldom be a topic of conversation because Britons travelling abroad have become so used to not taking their pets with them, as they know that they cannot be brought back here, that they have long ceased discussing it. My hon. Friend is right: only fox rabies is a problem in those countries, not dog rabies—but that is not the point. My hon. Friend himself said that the system that he is proposing is far more onerous and demanding than any that we apply to human beings, so he is not really suggesting free movement at all. The logic of his case is that there should be free movement, without controls or vaccinations.
I do not want to trivialise or minimise the value of the pet passport, even though someone suggested to me earlier that it might mean queues of black labradors waiting to have their passport photographs taken. I realise that microchips are seen as a useful form of international control, but we cannot take tattoos too seriously, although the Committee seemed to do so. The Government point out that tattoos on dogs are hard to read and are easily altered.
My worry is that all these systems are easily susceptible to fraud and error. Documents are easily forged, and information for computers and microchips can be easily tampered with when it is being put in. Such systems require scrutiny at a very limited number of ports of entry. As I understand it, we do not have the structures to allow these inspections to take place.
I ask the House to compare these proposals with the certainty that the quarantine system gives us. The only element of uncertainty comes with smuggling, but, as my hon. Friend the Member for Weston-super-Mare has already said, the new regime would be onerous and time-consuming—and there would still be smuggling. That possibility is not eliminated.
I suspect that most caring pet owners will not break the law and do not break it now. The fact is that six months' quarantine, although painful to some, is a system that gives the public great confidence that the disease is unlikely ever to re-enter this country. The BMA states:
Although the risk of a rabid animal entering the country is small, the consequences could be disastrous … Changes to the British way of life … would be far reaching. All pets would require vaccination; everyone involved with work with animals would need to be vaccinated; and any bite or scratch from a sick animal … would have to be treated immediately. The well-known British affection for animals would have to be tempered by caution".

Ms Corston: indicated dissent.

Sir Roger Moate: One cannot deny that these would be the consequences. In the past, the spread of rabies was

prevented by the muzzling of dogs. It is noteworthy that one of the contingency plans of MAFF for the outbreak of rabies would be poisoning foxes with strychnine, at serious risk to other animals. No one in his right mind wants to risk that. It is a fair point to make to distressed pet owners facing enforced separation from their pets under the quarantine system that the pain, suffering and cost of the spread of rabies would be far worse for pets and people alike.
I want to turn briefly to the question of risk, because that is what the argument is all about. How much greater would the risks be, if at all, if we abandoned the quarantine system and adopted the system of vaccination and microchips? It is here that I found the Select Committee's report and the speech by my hon. Friend the Member for Weston-super-Mare least convincing.
He said that we could import a rabid animal, in certain circumstances, once every 31 years. That is the statistical consideration. I remember severe floods in the town of Sheerness in my constituency one Christmas in the 1970s. Several hundred houses were flooded, and we were told that it was a one-in-a-thousand-year flood. A week later, the same houses were flooded again, but we were told that that did not alter the statistics— it was still one-in-a-thousand-year flood. So much for statistical averages.
I was therefore not impressed with the idea that only a very low risk is involved. I believe that, when the system was changed in Finland to one similar to what is proposed by the Select Committee, 10 times as many animals were imported to the country. Given the pet-loving nature of our nation, I suspect that there would be a huge increase in the number of pets brought to this country as well. The risks must therefore be seen in the context of a tremendous increase in the numbers.
It is easy to say, as the Committee does, that these risks would be small; but I prefer the verdict of the BMA, which says that one case introduced into a susceptible population may be enough to start an animal epidemic. I do not know why we should change a system that works and which brings with it so much confidence.
When it comes to foodstuffs, pesticides, herbicides, nitrate levels and organophosphates, we are told by the scientists that we should take no risks whatever. I remember the recent carrot episode, when it was discovered that one carrot in thousands might have too high an accumulation of something unpleasant. The whole system had to be changed, and the British population was warned to top and tail its carrots before eating them raw. The margin of safety had been reduced from 100 to 93— a minuscule change, but apparently we must not take risks with carrots. On the other hand, it seems that we can with rabies—[HON. MEMBERS: "Come on."] It is the same. If we take the scientific advice, we should have to decide that, if there is any risk at all in removing the quarantine system, we ought not to remove it. Most of us fear the rabid fox more than we do the carrot.
The Committee went wrong by failing to understand the incalculable value of the sense of security that has been achieved by current procedures: they work and they inspire confidence. Pet owners going abroad know the rules. Over the years, the British people have come to accept the system. Of course there are many who do not like it, but it is seen by the vast majority as an effective system. Preventing rabies from re-entering the country must be our paramount object. It is only when rabies has


been virtually eliminated around the world—diseases are being eliminated around the world—that we can contemplate abandoning our unique advantage of the ocean barriers which have allowed us to operate a highly effective quarantine system.

Mr. Paul Tyler: I beg to move,
That Class III, Vote 3 be reduced by £1,000 in respect of subheads B2 and D2 (Talcing action against diseases with implications for human health (PP2): current costs).
I am sure that hon. Members will recognise that our amendment is merely a device to underline the urgency and sense of frustration that a great many right hon. and hon. Members feel about some very difficult questions. Indeed, if the rules of the House permitted it, we would seek to increase the sum available for this purpose, not to decrease it.
I want to touch on rabies only briefly, because I want to discuss three other matters of concern to a large number of hon. Members. I also want to mention BSE, bovine TB, and sheep scab and blowfly. I do not do so as my party's spokesman on those issues, because there is a great deal of cross-party, non-partisan concern and interest. I have been fascinated to find that, on balance, I shall be on the same side as the Minister on rabies, and with the hon. Member for Faversham (Sir R. Moate), although I do not take such an apocalyptic view, which he appears to take, about the Select Committee's recommendations.
On the other side, I notice that the hon. Member for Weston-super-Mare (Sir J. Wiggin) has the cross-party support of the Committee. There has already been an eloquent explanation from the hon. Member for Bristol, East (Ms Corston) on why Members have changed their minds on the subject. I am sure that we are all seeking the same objectives. We arrive at them, perhaps, by different means.
I now deal with the Select Committee's report. I have the highest regard for the Select Committee—although I am not a member of it, and perhaps that increases my respect—collectively and individually. It has done the House a considerable service, not just with this report but with much of the other work that it has done. I believe, however, that the hon. Member for Weston-super-Mare, as Chairman, did not do justice to the arguments when he dismissed out of hand the concerns of the British Medical Association and the British Veterinary Association. I shall refer to those associations in a moment.
My approach—I am quite frank about it—is that I wanted to be persuaded by the Select Committee. I would have been delighted to feel that we could move away from the present restrictions, because I am only too conscious of the concerns and the unfortunate effects that the present arrangements have on pet owners—not just service personnel, as the hon. Member for Bristol, East said, but the large number of people who now travel for work purposes and who find that they cannot take their pets with them. We should recognise that the recommendations of the Select Committee will not solve that problem overnight.
On the BMA report, I shall quote from the guide that we have been given by the doctors, in which they say:
Britain cannot tolerate any lowering in the standards of precautions for keeping rabies out of Britain, as the consequences of their being breached could be so great. Although quarantine is

very expensive for those individuals who use it, the costs of eradicating rabies, if this were actually possible, once it had entered Britain, would be very much greater.
I notice that the Select Committee, in its reliance on the Swedish example, is not followed by the BMA, which points out in its own report, published on Monday of this week, that the Swedes have not experienced, and did not expect to experience, a reduction or elimination in smuggling as a result of the change. The report says:
A risk assessment of Sweden's then proposed vaccination system, carried out by the Swedish Board of Agriculture, concluded 'It is by no means self-evident that smuggling will be reduced if the rules are altered' (from quarantine to vaccination and certification).
So let us not be fooled into thinking that even those who have the experience on which the Select Committee places such reliance really expected to stamp out smuggling or have experienced a reduction in it.
The BMA and the BVA have demonstrated to great effect the differing circumstances in different countries. They point, for example, to the prevalence and growth in the number of urban foxes in the United Kingdom, which is totally different from anything experienced in the Scandinavian countries referred to in the debate.
In the circumstances, we have to take seriously the misgivings of the professionals. It is wrong simply to sweep them aside as if they did not matter, or to say in the words, I think, of the hon. Member for Workington (Mr. Campbell-Savours), "Oh, well, they would say that, wouldn't they? They have a financial interest." That reduces the value of the debate, and we have to take seriously what they say.
The BMA says of a rabies epidemic that there would be
massive killing of wildlife in affected areas, muzzling of dogs, keeping cats housebound and killing strays.
That is not a prospect that any of us can consider with equanimity.

Sir Jerry Wiggin: I did say, although not today in the House, that I was suspicious of the motives of the BVA, and I did imply that there might be some financial incentive in the quarantine system. I am convinced that that is not true and that is wrong, and I wish to withdraw it publicly. Indeed, if our system were to be adopted, I suspect that the veterinary profession would gain handsomely from the work involved in vaccination and certification.

Mr. Tyler: I am grateful to the hon. Gentleman. It was actually an Opposition Member who made that suggestion this evening. It is precisely because I think that the hon. Gentleman and his Committee have taken a level-headed approach to the issue, and I sympathise with it, that I regret the fact that they were rather dismissive this evening of the misgivings of the BMA and the BVA. I am with the Minister on this issue. I hope to demonstrate to her that, on this issue at least, I take a non-partisan view.

Sir Roger Moate: It is very courteous of the hon. Gentleman to give way. He suggested that I was being apocalyptic. In fact, I was quoting from the same sources as he is and used almost exactly the same words as those that he has just used.

Mr. Tyler: I understand the point that the hon. Gentleman made, but I still think that perhaps he


overplayed his case. On balance, this is not the right time to make the change. I understand that to be the position of the Ministry.
I now deal with BSE, bovine spongiform encephalopathy—I think that I have just about got it right—or what most people call mad cow disease. I ask the Minister, as this is the first opportunity that we have had to do so, to explain precisely how the Ministry views the changes in the arrangements that have been announced in the past few days. We have all assumed that the ban on the use of potentially affected parts of animal carcases in feedstuffs was the essential element in our protective system, and that once they were out of the food chain, we could look forward to a substantial improvement in the situation. That has been the accepted wisdom of the scientists who advise the Ministry, and, indeed, Members of the House.
However, the EU Commission's decision this week to change the arrangements, apparently under pressure from the German Government, raises some difficult questions. We are told on the one hand that it raises questions about the scientific basis on which our Ministry has been operating. It suggests that perhaps there is some way in which the disease can be inherited from cow to calf— otherwise, how can the Commission possibly justify changing the date—or, alternatively, that somehow the possible sources of the disease have remained in the food chain for longer than was previously anticipated. I hope that the Minister will reassure us on that.
I notice that the Meat and Livestock Commission had at least two views on that last Thursday. One veterinary officer was saying that it would make it easier to export from this country to other member states in the European Union, while another was saying that only
a sea change in the attitudes of German consumers to beef
would result in any change in the export situation.
The critical issue, surely, is: are the policies, to which we refer in our amendment and which we are debating tonight, still as scientifically and intellectually substantial? Can we rely on them in the same way as we have in the past, if, as seems likely, the EU has changed its stance and raised questions about the matter? We need to know whether our Government are satisfied with the integrity of the scientific thesis on which they are operating, and if they are not, is it just German protectionism in disguise?
I now deal with bovine tuberculosis. The Minister and I had a brief exchange on that at Question Time last week and she has been kind enough to write to me since. I wish to make it absolutely clear that I do not pretend to be an expert on this subject; no doubt other hon. Members are more expert than me. I look to the Select Committee—it has done a very good job on many subjects, including the import of livestock—as being the only effective mechanism that we have to get evidence from a wide range of different interests where clearly the reputation and credibility of the Ministry are in question, and they are in question.
I recall a briefing by the Minister's predecessor, which I have no doubt other hon. Members recall, on the subject of TB—it must have been two or two and a half years ago—when we were given to understand that there was real confidence that a change in the Ministry's policy in terms of live testing would not eradicate—we would not

expect that—but would dramatically change the situation. We were all given real confidence that that would be the case.
We have to look at the figures. We can dispute the exact scale of increase. The Minister has been kind enough to point out that the extrapolation of the figures that I gave the House last week would imply a steady rise over the year, and that may not be true. I accept that. But the Minister has also been good enough to say:
I am very worried about the incidence of bovine tuberculosis … the cause of that is badgers."—[Official Report, 6 July 1995; Vol. 263, c. 505.]
If that is true, I have to tell the Minister that an increasing number of fanners no longer believe it. I have had examples in my constituency, which I have brought to the Minister's attention, where the testing of badgers produced no results, where there is no obvious badger activity in the immediate surrounding area, where the animals have not had contact with other neighbouring farms, where there are few visitors to the farm and where it would seem that there is no obvious connection between a contaminated badger sett and an outbreak of TB. There are several examples of that, and farmers are as worried about it as anybody else. Yet the system relies entirely on the assumption that the circle of infection is due to badgers, as the Minister said again last week.
The hon. Member for Glanford and Scunthorpe (Mr. Morley) may be equally positive that badgers are not to blame, but I am more sceptical. [Interruption.] No doubt in due course the hon. Gentleman will put his view. I am an agnostic. All I do know is that dairy farmers and the animal welfare groups do not believe that the Ministry can continue with the present policy without independent objective analysis from outside the Ministry. It cannot remain judge of its own case for any longer.
It is for that reason that I have urged the Ministry to accept the need for such a study. If it can be included in the Select Committee's currently projected studies into the dairy industry, so be it, but if it has to be a separate study, I hope that the Chairman and the Minister will co-operate in some such independent objective inquiry. Otherwise, I cannot see how the two sides in the argument will stop their dialogue of the deaf.
In the meantime, I hope that no one is under any illusion about the substantial cost to the industry. I have here an example of a farm in Gloucestershire that was extensively analysed in a recent edition of Farmers' Weekly, where the estimated cost of the testing, direct movement restriction, changing farm policy, insurance costs and so on is £111,000. That is a net cost after compensation has been received. It is a huge sum.
The farmer, Mr. Rowe, says:
MAFF is so behind with badger trapping that, in some cases, there is a six to 10-month gap between a breakdown and trapping … We shall have to turn our stock out on to pasture which is riddled with badgers that we know have TB. A badger vaccine, with food used as a vector, is the main answer. Otherwise TB in cattle will continue. MAFF knows the problem but it needs more funding from the Treasury.
There are other examples.
I am sure that hon. Members from dairy areas will be able to confirm that there is real concern about the lack of resources. Even if one accepts the MAFF thesis, the lack of resources means that there is a long delay before action is taken. I had another example at my advice surgery last weekend, of a farmer who was crying out for


live testing. Apparently, the veterinary service is prepared to provide it, but the lack of resources means that there is a long delay.
It is the responsibility of Members of Parliament to monitor, scrutinise and call the Government to account. That is the precise purpose of today's debate. I do not pretend that I have a solution to every complicated aspect of the problem. I certainly have not. A great many much wiser heads than mine have been applied to it. But what I do believe is that, just as the hon. Member for Weston-super-Mare could claim that his Select Committee had approached in an open-minded and thorough way the problem of the import of livestock, it should be asked to look at this problem with exactly the same approach.
Finally, I come to the problems of sheep scab and blowfly and the products that are used to treat and prevent those diseases in sheep. The Minister has been kind enough to meet a small all-party group on a number of occasions, as did previous Ministers of Agriculture, Fisheries and Food, the right hon. Members for Norfolk, South-West (Mrs. Shephard) and for Suffolk, Coastal (Mr. Gummer). I think that the Minister acknowledges that there is all-party concern.
Here we have a problem where the animal disease that we are seeking to cure is not going away, but at the same time the apparently most effective way of dealing with it has the most horrendous side effects in terms of human health. The products to which I am referring are the organophosphorous compounds that are most often used in sheep dip to try to deal with those problems.
For many years, sheep scab was a notifiable disease. For many years, the Ministry effectively enforced twice yearly and then, for a few years, annually, the compulsory dipping of sheep. Suddenly, in 1992, without much warning, that was removed, either, according to one version, because sheep scab had been eradicated or was in the process of being eradicated, or because, according to another version, it did not seem to be doing much good as there was still a lot of sheep scab about. They were curiously conflicting arguments.
Whatever may have been the rationale then, the rationale now is surely inadequate. Since 1992—the Ministry has just issued some more information—sheep scab has been on the increase. The Ministry has been monitoring carefully what has been happening in markets. It cannot give exact and detailed figures but, as a result, it is increasing sheep scab surveillance. The Minister has announced in my part of the world in the south-west that fines of up to £5,000 are possible for sheep scab—not, it should be said, under the notifiable disease legislation, as I understand it, but under some environmental health or animal cruelty legislation. That is fair enough. Sheep scab is a serious disease.
But hon. Members surely cannot be satisfied when the Government are spending quite a lot of money, as is the industry, without achieving any improvement. All we are doing is causing a great many people the discomfort, cost and, potentially, the damage to their health, from a product that clearly is not the answer.
At the meeting with the Minister on 28 June, she undertook to examine urgently a number of specific issues affecting human health with her opposite number at the Department of Health. I hope that this evening she will briefly—I understand the difficulties of time—refer to the outcome of those discussions.
One of the issues that we specifically asked the Ministers to address was the apparent correlation of high suicide rates in some parts of the country, which appeared to follow closely on some of the areas where dipping with organophosphates was most prevalent.
I have a letter here from one of the consultant psychiatrists who has particularly studied the problem, Dr. Davies, of the Avalon NHS trust based in Taunton. He not only draws attention to the weight of evidence, from his own experience and that of his colleagues, of a connection between sheep dip exposure and high suicide rates, but offers his services to try to improve the amount of information that could be available to the Department of Health on this specific issue.
In that letter, Dr. Davies says:
I am sure that if dealing with a pharmaceutical agent, such a weight of evidence would result in its withdrawal from the market and I find it difficult to understand why the same criteria are not applied to environmental toxins. Every organophosphate exposed fanner that I have interviewed, whether as a NHS referral or part of my research activities, has admitted to intense episodes of suicidal ideation well beyond the 'life is not worth living' stage.
I hope that the Department of Health will take that evidence as seriously as I know the Minister does. I also hope that the offer to undertake additional research into the effects of organophosphates in terms of neuro-psychiatric toxicity will be taken up.
There are ways in which the Minister can respond proactively. For instance, we must return to some form of notifiable disease arrangement if the industry is to take sheep scab seriously. A return to the old compulsory dipping scheme will not be sufficient, however. I hope that a compulsory treatment scheme using the new products—the non-OP dips that are now available, and the injectables—will deal with the problem more effectively. Ironically, there is now a blowfly that is immune to OPs, while some humans at least seem to be sensitive to them.
We must recognise that manufacturers of new products will not be able to reduce the unit cost, allowing take-up to be effective in the industry, until some help is given with the transition. I hope that, now that it is recognised that the use of OP dips imposes considerable costs on the industry, the Ministry and, indeed, the health service, the Government will find a way of subsidising the transition to allow the withdrawal of those products and the introduction of new products that are safer for all concerned.
I am sorry to have had to cover so much territory at such speed, but this is an unusual opportunity. I am grateful to the House for listening so patiently, and I hope that in due course the Minister will respond to all four of the points that I have made.

Mr. Roger Gale: I wish to return to the general question of the Supply estimates, which relate largely—although not exclusively—to animal welfare and animal health issues. Let me again thank my hon. Friend the Parliamentary Secretary for the diligence with which she has promoted animal welfare issues throughout the European Union, and welcome my right hon. and learned Friend the Minister to his new job.
On behalf of the all-party animal welfare group, which I chair, I applaud the sentiments that my right hon. and learned Friend expressed at the opening of the new offices of the Royal College of Veterinary Surgeons last week. I


was delighted to learn that he intends to target the banning of veal crates as the Government's next objective. I hope that scientific evidence will enable real progress to be made by the end of the year.
We have dealt largely with matters relating to the single market and open frontiers. It has been said—correctly— that free trade in animals sometimes means free trade in diseases. In recent months, there have been outbreaks of equine viral arteritis. Earlier this week, my hon. Friend the Parliamentary Secretary laid an order relating to the control of EVA in the United Kingdom. I hope that, when she winds up the debate, she will be able to give us some idea of the measures that Ministers are taking to control the movement of shedding stallions, not just in the United Kingdom but throughout the European Union.
Contagious diseases have also been imported in culled sheep from Poland and Spain. In a number of instances, animal diseases that we had thought to be either under control or eradicated in this country have been imported. That demonstrates the need for rigid controls in the country of origin, and strict on-farm quarantine when animals arrive in the United Kingdom.
Outbreaks of that kind underline the importance of veterinary education and the maintaining of veterinary standards throughout the European Union. My hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) mentioned that in connection with the Select Committee report. Is my hon. Friend the Parliamentary Secretary able to make a further announcement about the availability of European Commission funds for veterinary education? We had the impression that the Commission would look favourably on that, but there seems to have been a hiatus. A settlement is overdue.
Clearly, in the minds of the media, this is "the rabies debate". I mentioned free trade in diseases. I have no wish to see rabies spread throughout the United Kingdom, but I believe that, if there is a free trade in diseases, there is also a free trade in hysteria and prejudice, particularly about rabies. I am persuaded by the scientific arguments—as, clearly, are many other hon. Members— that the time has come to make real progress.
I listened with interest to the speech of my hon. Friend the Member for Weston-super-Mare, and I studied his Committee's excellent report with great care. Like earlier speakers, I started from the premise that the controls that we have, we hold; they work, and we should not mend things that are not broken.
Let us examine a couple of the myths. My hon. Friend the Member for Faversham (Sir R. Moate) said that quarantine worked. Does it? That must be the first myth. We know that animals are smuggled into this country on ferries, possibly—now—through the channel tunnel, and on sailing yachts entering the many ports along the south and other coasts. I am told—much of the evidence is anecdotal—that it is relatively easy to obtain an anaesthetic for a dog in northern France. One can knock out the dog, chuck it into the boot and put a blanket over it and it wakes up after half an hour through the tunnel, 45 minutes on the hovercraft or one hour on the ferry, somewhere in the United Kingdom. The risk of detection is minimal. If one weighs that risk against a bill of £1,000 or £1,200 for six months' quarantine—we have heard various figures—and the real distress that one feels at

having to quarantine one's animals, it must seem worth taking. Yes, the penalties for detection are severe, but the chances of detection are fairly remote.
The stories are anecdotal, so let me put my own anecdote on the record. As chairman of the all-party animal welfare group and a Kent Member of Parliament, I received a third-party approach from an American, apparently resident in Switzerland, who wanted to bring a dalmatian into the UK and, peculiarly, sought my advice as to how that could be done by bending the rules. I had to say that he had come to the wrong person, but the approach was made.
The second myth is the huge number of cases. It is a half-myth; it is a misrepresentation of fact. I took part in a radio discussion on Saturday morning with an "expert" on this subject who said that there were 15,000 cases of rabies worldwide every year, but I am told by my hon. Friend the Member for Faversham that, based on a House of Commons Library report, there are 30,000 or more such cases in India alone. I am not sure where these figures come from, but the implication is that they affect us throughout northern Europe and the UK. Perhaps someone in the House can tell me when the last case of human rabies was detected in northern Europe. I do not think that the British Medical Association referred to that in its report and I have no reference anywhere else.
What I do know, because the figures are given in the report produced by the Committee of my hon. Friend the Member for Weston-super-Mare, is that 150,000 dogs and cats have been imported into the UK since 1972 and that, as was mentioned earlier, out of those 150,000 animals, two from third countries developed rabies; none from the European Union developed the disease. No one I know is suggesting that there should be any relaxation of the rules from third countries. We are considering the European Union specifically at present.

Sir Jerry Wiggin: Rabies-free countries.

Mr. Gale: I am coming to that.
I want to ask my hon. Friend the Parliamentary Secretary, not to give an answer tonight, because if I receive one tonight, it will be no, but to consider two proposals. First, will she consider that we should allow the importing of animals owned by members of the armed forces and by members of the diplomatic corps, and the importing of guide dogs owned by anyone, provided that they are vaccinated, have proper documentation, have had blood tests and are identifiable?
In the case of forces personnel coming from rabies-free countries such as Cyprus, I see no difficulty with that. It would be possible to vaccinate a dog or cat six months before return, because the date of return is always known, to have that animal examined by an officer of the Royal Army Veterinary Corps and certified as okay. At present, soldiers and airmen coming from Cyprus having done a two-year tour of duty have two choices: they either bring the family pet home and kennel it at a cost of some £1,200 for six months, or they use the services of the excellent British Army Rescue Centre to have the animal rehomed in Cyprus.
There is—I was going to say a trade, but it is not a commercial business—an enterprise that recycles family pets so that outgoing services families are able to take on, not unwanted, but unimportable animals left behind by their return home. That is daft, unnecessary and inhumane


and there is no reason for maintaining it. If we cannot trust the members of our own diplomatic corps to have their animals vaccinated and properly documented, and allow them to move around the world without having to quarantine their animals every time they are brought home at the end of a tour of duty, we should be able to.
The hon. Member for Bristol, East (Ms Corston) mentioned guide dogs. Clearly, certainly in the European Union, we should be able to make immediate provision for people travelling abroad or returning with guide dogs, provided that they are properly documented.
My second proposal to my hon. Friend the Parliamentary Secretary is this. In her letter to me of 30 June, in response to a constituent's inquiry, she said:
It is possible to regulate commercial imports through a system of vaccination, blood testing, controlled transportation, advanced notification and checks at destination. It is difficult to see how checks of this kind could be applied to pet animals travelling with their owners. At the very least, to ensure the same degree of certainty about the health status and identity of the animal would require a considerable increase in administrative action and administrative costs.
I am dreadfully sorry, but I do not accept that. We usually agree, but on this issue my hon. Friend is right in the first half of the paragraph but absolutely wrong in the second.
I want to make a proposal. I want my hon. Friend to introduce a pilot scheme through the ports of Ramsgate in Thanet and Dover, two of the most widely used Kent channel ports. Initially, my proposal would not allow the importing of animals from the European Union, but would allow the reimporting of animals taken out from the United Kingdom by United Kingdom citizens going on holiday. That should be done provided that those animals have been vaccinated six months in advance of travel, have been blood tested after six months, have a canine or feline passport certified by the vet who carried out the test and that they are microchipped to what I hope will become the FECAVA—the Federation of European Companion Animals Veterinary Association—common European standard of identification.
Given all that information, I can see no reason why it should not be perfectly feasible to allow a family to take a dog or a cat on holiday. They would book on to a given ferry—which they do anyway—and have the animal placed in a holding kennel at the port upon entry.
My hon. Friend the Member for Faversham referred to black labradors. I happen to have a black labrador and I would love to take it on holiday with me. We do not want a long queue of cars at ports, so I would be happy to leave my animal in a holding kennel. I would be happy to allow that animal to be collected with others on the same day and taken to a quarantine kennel where it would be blood tested again and identified. I would then collect my animal from the quarantine kennel. There would be no massive bureaucracy at the port and no massive cost except to me, the owner. If I am prepared to pay the entire cost, I cannot see why it is not possible to do it.
There is an added advantage. We have had representations from members of the Quarantine Kennels Owners Association who have justifiably expressed concern about the future of their considerable investment in their facilities. I believe that, with the system that I have outlined, they would benefit from the trade in animals coming in from third countries where quarantine would continue and from the additional business generated by those who would use the kennels on their return from holiday.
I am fortunate in that I never leave my home unattended so my animals stay at home. Not everybody is that lucky. Some people have to put their cats or dogs into kennels or catteries for a fortnight when they go on holiday. I cannot believe that those people would prefer to put their animals in a kennel for a fortnight rather than for two or three days. Equally, I can see no reason why the quarantine kennel should not have the business that would be generated by such a scheme.
I can see no risk to animal health in the United Kingdom from that process. I believe that if we can establish that that works on a pilot basis, it should be possible to extend the process of vaccination, blood testing and microchip identification to the whole of Europe so as to allow European Union citizens to bring their animals into the United Kingdom on the same basis.
I believe that we have a choice, but to do nothing is not part of that choice. There will be more, not fewer, animals smuggled into the United Kingdom. As has been said already, the risk is not from the responsible, law-abiding animal owner but from the smuggler—the person who is most likely to bring in an animal that may not have been vaccinated. A responsible pet owner—from any country in Europe, including the United Kingdom— will want to look after his or her animal. The risk is from the smuggled animal.
We must forget the mythology about rabid foxes wandering through the channel tunnel. If we are to eradicate the risk caused by smuggled animals, we must remove the incentive to smuggle. Provided that it is cheaper—what I am proposing would be a great deal cheaper than the average £1,200 quarantine fees—and that it is relatively simple to go through the necessary processes, people will not take the risk of a fine or imprisonment for smuggling.
There is a way forward. If we are to prevent the growing illegal trade and accept that in a wider Europe people will want to travel with their companion animals, we must do something positive. I believe that what I have suggested, which is based on scientific evidence taken by the Select Committee—details of which are contained in the report—is a way forward.
The estimates make provision for the funding of European negotiation and for matters relating to the Animals (Scientific Procedures) Act 1986. My hon. Friend the Minister may feel that what I am about to say is a matter for either the Home Office or the Department of Trade and Industry, but she would not expect me to miss this opportunity to place on record, again, the case for funding the work of the European centre for the validation of alternative methods to the use of animals in experimentation. There is a great deal of work to do and every penny of the money in the estimates, and much more, will be needed to support that work.

Mr. Colin Pickthall: I want to speak briefly in support of my colleagues the hon. Members for Weston-super-Mare (Sir J. Wiggin) and for Bristol, East (Ms Corston) in what they have said this evening. I also support much of what was said by the hon. Member for Thanet, North (Mr. Gale), especially his comment that doing nothing is not a choice.
I confess that I entered into the investigation on health controls on the importation of live animals with a strong prejudice in favour of the retention of quarantine. It


appeared to me that one of the great benefits of this country being an island was the possibility of keeping such diseases as rabies at bay. Quarantine had appeared to work for most of the century and I was predisposed to say, "If it ain't broke, don't fix it."
In addition, the advent of the channel tunnel had agitated many of the rural population in my constituency to the point where they had calculated that as a fox could travel at about 25 miles a day, rabid animals would be through the tunnel and biting people in west Lancashire in less than a fortnight.

Mr. Elliot Morley: Faster than a train.

Mr. Pickthall: It is certainly faster than a train on the west coast main line.
Rabies is such a horrible disease that we must take such fears seriously. It was my belief that any relaxation of quarantine would seriously affect public confidence. That view was echoed by the then Minister when she gave evidence to the Committee. She said:
Our scientific advice and our veterinary advice is that quarantine continues to be the most practical, most effective way of keeping rabies out.
I must add to my predisposition in favour of the retention of quarantine the fact that my withers are not at all wrung by the laments of pet owners at being separated from their dogs or cats. I am not a pet owner and I am not especially a pet lover. In the context of rabies, such emotion from pet owners is, to put it bluntly, irrelevant.
My change of mind during the course of the Committee's investigation was based strictly on the practical evidence that we heard and examined. First, as was mentioned by the hon. Member for Weston-super-Mare, the cost of quarantine is somewhere in excess of £1,000—indeed, we heard estimates of up to £1,500. Therefore, on at least a financial level, quarantine is a relatively easy option for the well-heeled, but a considerable burden for people of average means, such as many of the service personnel who gave us written evidence.
Secondly, as has been said, the cost of quarantine provides a positive incentive for the smuggling of animals. On our visit to the Heathrow quarantine station, we were given evidence of animals that had been abandoned in panic on the airport tarmac; we were shown a bush-baby with its hind legs broken, which had been smuggled in in someone's top pocket.
I might say, by the way, that when we were being entertained by the entire security staff of that quarantine station—we were in the reptile section—we suddenly found in front of us a splendid looking snake wriggling about on the floor, much to the alarm of the hon. Member for Congleton (Mrs. Winterton). That incident was, I recall, rather spectacularly recorded by the BBC.
On the issue of smuggling, I have not had a chance to read the British Medical Association document that came out a few days ago but, thanks to my hon. Friend the Member for Bristol, East, I have had a chance to read the covering letter. In two consecutive sentences, the letter states:
Anecdotal evidence suggests few obstacles face those attempting to avoid quarantine by smuggling animals, particularly by car, from France to Britain. The present quarantine system has had a 100 per cent. success rate since 1971.

What sort of success rate is that? Of course, for the animals that are trapped by quarantine, there is a 100 per cent. success rate, but what about the others to which hon. Members have referred?
Mr. Wykeham of the Quarantine Kennel Owners Association pointed out to us in his evidence:
Instances have occurred when the carrying agent for the quarantine kennel has failed for one reason or another to make the rendezvous with the ferry and the car carrying the animal has driven off the vessel and out of the port without check or hindrance.
We are talking not only about smuggling but, in some cases, about incompetence and lack of security.
Those incidents alerted me and, I am sure, other Committee members to the vastness and intricacy of the British coastline and the increase in the use of boats for pleasure and business. Ironically, the one link that seems secure from rabies is the channel tunnel, which has, as we saw for ourselves, very comprehensive defences against rabies. Virtually everywhere else seems to be vulnerable.
We also heard of—I will not go into this because my colleagues have discussed it—the experience of other countries such Sweden and Denmark. We also dealt with—this seems to me important—the arrangements for trading dogs and cats under the Balai directive and the exemptions for farm animal imports. Both point to an absurd discrepancy which is, not surprisingly, leapt upon by pet owners abroad who see that commercial advantage can remove quarantine like magic in some cases but that they remain trapped by quarantine. That is an injustice and illogicality which the Committee's recommendations properly address.
The Committee's recommendations on rabies control— in the end, unanimously and without reluctance—is, in my view, a stricter control than that offered by quarantine. They make no change to the importation of animals from non-approved countries—that is, countries where rabies is widespread—but introduce vaccination, microchipping and blood-testing regimes, retain import licensing and introduce animal passports.
As our report said, if we have erred, it is very much on the side of caution. The fact that the Government do not approve those recommendations emanates from their understandable desire to address what they perceive as a strong emotional desire on the part of much of the population to retain quarantine—the sort of feeling that I had about the matter when we started the investigation— and also the public perception that quarantine is the only answer.
It must be the Government's task occasionally to challenge emotional perceptions, and this is one such case. If the Government retain the status quo, they must say precisely why our recommendations would not strengthen the UK's defences against rabies and correct an illogical injustice.
The Committee's report covered a wide range of concerns. I shall raise just one, which particularly interested me. We were made very much aware—it was the main purpose of the investigation—of the increased problems in farm animal health created by the single market, the relaxation of borders in the EU, and the increased speed of the transit of animals. Despite our reservations, and those of our witnesses, about some areas of the European Union, on the whole the EU seems to take the problem seriously. However, we continually returned to the vexed question of movements of animals across the borders between eastern Europe and the EU.
Mr. Anthony, the retiring president of the Royal College of Veterinary Surgeons, identified three major disease corridors: first, Russia-Poland-Germany; secondly, Turkey and Iran through Greece to Austria; and thirdly and potentially, north Africa to Spain and Italy. He specified that veterinary training and standards of certification were unsatisfactory in some areas and that
the checks at the borders
of the EU
are not as high as we would wish.
For example, he told us of the importation of loads of Polish sheep early in 1994, on which there were many documentary deficiencies. One load had animals that were unfit for human consumption and some dead on arrival. In Poland, those sheep are sold for £2 a head and the transporter gets £5 a head. They are sold in the UK for £27 a head—approximately £6,000 profit per lorry load. That is a considerable incentive for at least cutting corners in crossing the Polish-German border, an area that Mr. Anthony said was "very difficult to administer". Once such loads of animals are in the European Union, their movements are relatively unhindered.
Mr. Neal King, vice-president of the RCVS, told us:
Over the years we have kept disease out by quality … we have done this by our own certification.
He said that we now depend on others and went on:
We depend on their attitude to the animals coming in over their third country frontier rather than our attitude when they come in from the Channel to us".
Mr. Kershaw-Dalby, secretary to the National Cattle Breeders' Association, told us of animals going from Poland to France, where they tested positive for foot and mouth disease. He said:
Some of those animals were never traced. The monitoring of ports is non-existent".
He said that some of the documentation was "obscure" and that, for example, the instruction that all cattle imported from Europe must be treated for warble fly appears
on page 37 in minute print".
The NCBA also gave evidence of eastern European cattle being "laundered" in Austria, which at that time was a useful staging post because of its favoured status.
We therefore have four problems to face up to. The first is the leaky nature of the border between the European Union and the east and the clear deficiencies of the border inspection posts. Clearly, that is a task for the European Commission to tackle, and part of that job must be some hard education work in the eastern European countries, which is all the more necessary because of the likely closer relationship with Poland, former Czechoslovakia and Hungary in the not too distant future. The second is the need for much tighter monitoring and inspection of animals coming from Europe to the UK. The third is the need for clearer and tougher guidelines for dealers, importers and farmers, and the fourth is a much tougher pan-European regime for veterinarians.
I welcome the Government's response on holding periods, but the enthusiasm with which they embrace the notion in paragraph 7 of Command 2735 that the primary responsibility for preventing the introduction of disease now rests with importers is bothering. That is the only weak part of the Committee's report. Of course, most importers and farmers take their responsibilities seriously. They do not want to damage their herds; they do not want

to introduce disease. However, in the case of the diseases that we have discussed, it takes few people—perhaps only one renegade—to create a catastrophe. The importer's responsibilities must be backed by the Government sanctions, which the Committee recommends. It is ultimately a communal priority and a communal responsibility, not only a responsibility of the importers.
Although our report rejected the alarmist "disease time bomb" theory outlined for us by some witnesses, there can be little doubt that, as movement of animals from eastern Europe and possibly also from north Africa and the near east increases, there is a clear potential danger of disease spread, accelerated by ease of movement in the EU. The specific recommendations made by the Committee in paragraph 47 of its report are a serious attempt to minimise risk. Naturally, there are financial implications, but the potential cost of a breakdown of fail-safe mechanisms is astronomical.
In a sense, the problems of combating rabies importation and of combating the importation of farm animal diseases are similar. In each case, success depends on accurate information, especially identification, on rigorous monitoring, on punitive sanctions against transgressors, on cost-effectiveness so as not to push people into transgression and on partnership between Government and the importers and farmers to ensure that risks are minimised, in all our interests.
I find it hard to reconcile the Government's deep suspicion of the European Union's progress on rabies control with their sanguine opinion of the disease importation problems of farm animals and the exemptions under the Balai directive. I can only conclude that the Government are responding with emotion in the first case and with some practical logic in the second case.
In my opinion, as a member of the Select Committee, who is not easily convinced of anything, the Committee members tackled both those main issues with scrupulous practicality. I urge the Government to make it a priority to reconsider the recommendations on replacing quarantine as soon as, in their own terms, the Swedish and Danish experiences can be reliably examined—I would hope, in 12 months.

Mr. Richard Alexander: I shall be brief, so that others might have an opportunity to speak.
Probably no aspect of man's contact with the animal world creates more fear and anxiety than possible contact with rabies. It is an understandable fear, which the House must recognise, and which was articulated earlier, yet the Select Committee is telling the House, "Perhaps time has moved on; perhaps we should consider the issue again".
The popular reaction in the country is, "We have not had rabies in Britain for many years; let's not take risks now," or, "The channel tunnel is creating greater opportunities for rabies to come in; let's not take risks now." That was the gist of some of the evidence that the Select Committee received, but it also received evidence, which was new to many of us, of the unintentional stress and distress caused to animals—as well as that experienced by the owner—as a result of quarantine.
The animal must, as we know, be kept in quarantine for six months, which is a significant part of its life. It does not know that it is there for the good of the public; all it knows is that its owner and its friend has put it away


for six months. The Association of RAF Wives described quarantine as "an extremely cruel procedure", involving unnecessary expense, when there are obvious other ways in which to establish that there is no risk.
I shall not discuss cost in detail, but I shall emphasise the arguments that have been made about quarantine being expensive. It is expensive for the expatriate and for the diplomat and his family, and the cost increases the possibility of smuggling, which other colleagues have mentioned. The paradox is that, by imposing stringent controls and making the process expensive, the less responsible pet owner is tempted to smuggle and the decent, responsible pet owner has to pay the cost.
The British Medical Association has submitted a memorandum to many of us. We must recognise the concern of the people who would give medical care to anyone who was affected by rabies, which is an appalling prospect for the medical profession. In the memorandum, there is little scientific evidence to back up what the association says. In addition, the BMA, unlike the learned bodies that gave evidence to us, gives no evidence for the concern that it is now raising with hon. Members. It would have been helpful if the association had come to the Select Committee and told us its views.
We await the comments of the Parliamentary Secretary with interest. The Government's response to the Select Committee report was in three parts. The then Minister of Agriculture, my right hon. Friend the Member for Norfolk, South-West (Mrs. Shephard), said that the problem was "onerous for some people." That is precisely the point that the Committee made. The Committee would say that the problem is not merely onerous, but intolerable for thousands of decent British people who want to travel with their pets.
The Minister also accepted that microchips were reliable and that the blood test was effective one month after vaccination, yet the Ministry does not draw the obvious conclusion that a pet passport would be a safe method of taking a pet out of the United Kingdom into certain other countries and bringing it back. I suggest that Customs and Excise could easily control that method with the red channel at ports and airports—anywhere where there is a possibility of a pet coming in.
The report is far-sighted. The issue obviously raises emotions, but fortunately—and rarely in the House—it is a non-party political issue. The arguments have been set out and they have been adduced here tonight. It is up to the public and to their representatives to take the discussion further. I am sure that the House waits with great interest for the response from both the Government and the Opposition to what has been said today.

Mr. Ieuan Wyn Jones (Ynys Môn): This has been an interesting and lively debate; it has also been instructive. All the members of the Select Committee who have spoken, other than the hon. Member for Weston-super-Mare (Sir J. Wiggin)—I am privileged to be a member of the Select Committee—came to the inquiry utterly convinced that the quarantine regulations had to stay as they were. It was the conduct of the inquiry and the evidence we heard, especially the overwhelming scientific evidence, that convinced us that the rules had to

be changed and that quarantine eventually had to come to an end in a limited way in the United Kingdom. In our report, we have described the way in which the rules can now be changed.
Although I listened with great care to what the hon. Member for Faversham (Sir R. Moate) said, I am pretty convinced, knowing his attitude to the Committee's work, that if he had been a member of our Committee at the time, he would have started from the same position as us, but would have been persuaded, as we were, by the evidence we heard. It was a tall task to expect us to change our minds, but we did and it is right that those of us who are members of the Select Committee place that fact on the record.
There were four reasons for my changing my mind. First, I was convinced, in view of developments since the Waterhouse report in 1970, of the effectiveness of vaccine, of the use of microchips and of developments in medicine and technology. Secondly, I was convinced because of the success of the oral vaccine programme in the European Community. We had a briefing that it was likely that rabies would be eradicated, to take the most optimistic approach, in two or three years. Even the pessimists said that it would be eradicated by the end of the century. We are making excellent progress, from 8,500 cases of animal rabies in 1989 to 1,200 in 1993.
Since 1994, we have allowed in commercially traded dogs and cats, subject to certain conditions. I agree entirely with my hon. Friend—if I can call her that—the Member for Bristol, East (Ms Corston). The overwhelming evidence presented when the Committee visited Sweden and Denmark was the clincher for me. Those countries have traditions and problems that are similar to ours and Sweden has been rabies free since 1886. They examined all the evidence—including the fact that Sweden and Germany share a border—and they were utterly convinced that they should change the rules.
Finally, if we had thought for a moment that our recommendation would increase the risk of rabies, we would never have suggested it. The tests that we propose are as safe as the quarantine regulations, but they are far more efficient, less costly and much less distressing for the animals. We have put forward a proposal for the new century that is compatible with advances in medicine and in technology.

Mr. Elliot Morley: On behalf of the Opposition, I welcome the fifth report of the Agriculture Select Committee. It is up to the Committee's usual high standard, and we congratulate the Chairman, the hon. Member for Weston-super-Mare (Sir J. Wiggin), and the other Committee members on the way in which they have presented the report. I am a former member of the Committee and I enjoyed serving on it. I am familiar with the detailed work involved in preparing a report.
Controls on the importation of live animals are a key issue in terms of animal welfare and the economic impact on the country. We must ensure that we maintain our very high standards and our disease-free status. With the advent of the single market, concerns were expressed about the relaxation of checks at points of entry, so it was important to examine the issues in some detail.
I believe that we should continue to examine those controls and, in some cases, to tighten them. The suggestion of using coloured ear tags to identify the


country of origin of animal imports is a good idea that is worth further examination. The reintroduction of a holding period at points of distribution also has many advantages, not least in the context of the controversy surrounding live animal exports and imports. The holding period would provide an opportunity to examine the condition of the animals, to check for disease and ton ensure that they were being treated properly. In their response, the Government accepted the argument for a period of three working days and, while I welcome that concession, I prefer the Committee's original recommendation.
The Government have made it clear that importers must act responsibly. The campaign involving the distribution of "Don't Import Disease" leaflets has proved helpful. However, to be fair, some sectors of the industry—such as the pig sector—have introduced their own quality control measures and they deserve credit for that. The National Farmers Union also deserves commendation for its attempts to introduce a warranty and indemnity scheme.
However, guidance has not prevented outbreaks of disease such as warble fly in 1994. While I am aware that inspections have been increased at ports of entry, the Government must address a number of remaining problems. The first is accurate and consistent veterinary certification, as mentioned by the Committee. The second is a common standard of veterinary competence. That problem was recognised in the Bendixen-Dexter report, which I agree should be made public.
Thirdly, there is the problem of the absence of the system for information inspections at frontiers—SHIFT— computer system, which monitors animal movement. Even when computer systems are in place and working properly, there may be an accuracy problem. The Minister might recall the problem with the ANIMO system, which I identified in written questions that I tabled to him. I drew the Minister's attention to fraudulent certification— which is outside his control—and the fact that mistakes were being made when details were being entered into the database.
Fourthly, we must have adequate inspection procedures at points of entry. I do not believe that the single market precludes that and I note that the French are considering reintroducing spot checks at their borders. The state veterinary service has a major role to play in that process. I believe that the Government risk undermining the high standards of animal health in this Britain by cutting the state veterinary service. There has already been a staff cut of 31 per cent.—their number has decreased from 580 in 1979 to 403 in 1994. In 1979, there were 25 veterinary inspection centres; now, there are only 13.
There is concern that, after seven years, there are still quite a large number of outbreaks of BSE, but we welcome the overall sharp reduction in the number of cases. As has been said, sheep scab raises all-party concern. I note that, after many representations, the Ministry of Agriculture, Fisheries and Food has admitted that there has been an increase in sheep scab outbreaks since compulsory dipping ended in 1992. On MAFF's own figures in its recent report, private vets have reported an increase from 254 outbreaks in 1994 to 595 so far this year—more than double, only half-way through the year.
I also refer the Government to the recent report by the Farm Animal Welfare Council on the welfare of sheep. It calls firmly for sheep scab to be reinstated as a notifiable disease. The Government's response to that report was

inadequate. The FAWC also recognises concern about the use of organophosphate sheep dips and the need for tight control as well as the development of alternatives. In effect, the Government said that the sheep industry should play a role in financing the development of alternatives. That is just not a realistic response because sheep farmers are among the poorest in the agriculture sector. They often have small farms, run by small self-employed families who are tough and self-reliant but not really in a position to provide a major contribution to such research.
I recently met a Mrs. Brenda Sutcliffe of Sheepbank farm, Littleborough and Saddleworth, with whom I had the privilege of discussing sheep dips and the problems of organophosphate dips. Incidentally, she probably knows more about the chemical composition and effects of OP sheep dips than anyone I have met. The Government owe people like Mrs. Sutcliffe and her family an open and detailed examination of claims about OP dips, and they should give some thought to how to help such people, who might not be able to work for their full working life if the claims about the detrimental effect prove to be correct.
I have a particular interest in bovine tuberculosis and badger control. It is a major area which deserves a debate on its own. I know that it has been proposed to refer the issue to the Select Committee, which would be a welcome step forward. At this stage, the Opposition remain unconvinced that the badger culling policy is either acceptable or, indeed, effective. I know and sympathise with farmers who are facing the problem and the financial impact of the outbreak of bovine TB. Nevertheless, there are a great many anomalies in the approach to the problem. The science is really shaky, because it has not been scientifically proved that badgers cannot be infected by cattle. That needs to be considered very carefully and, at the moment, too many people have set their faces against examining it.
As the Chairman of the Select Committee said, there would be an opportunity to look into that matter if the dairy industry were considered. I know that, given the hon. Gentleman's affection for badgers, he will look into the matter very sympathetically.
The part of the Select Committee report that deals with rabies has obviously attracted a great deal of attention. That is understandable, because rabies is a very emotional issue. It is a terrible disease, people are very concerned about it, and we have to ensure that we maintain our rabies-free status. On behalf of the Opposition, I have to say that the Select Committee's representations on the issue were well researched and well argued. It put forward a very convincing case, but we do not differ from the Government in that we want to ensure that the controls on rabies are effective. Before we move away from them, we must be convinced that any changes are workable.
Having said that, I believe that the Government's response has been somewhat negative. I have been impressed by representations made by people who have pets abroad and by those who believe that there are alternatives. The Government could be more open-minded, bearing in mind the changes in the directive. I wrote to the Minister suggesting that she consider a trial scheme in Cyprus, which is a rabies-free island, on the lines suggested by the hon. Member for Thanet, North (Mr. Gale). The system could be put in place and its effectiveness, or otherwise, examined. There would be no risk, because the animals would be travelling to and from


rabies-free islands. The Minister gave me a courteous written reply, but her point that other countries have a stronger claim was not convincing. Perhaps she will give that suggestion further thought.
We must not compromise Britain's rabies-free status, but there should be wide consultation, careful consideration and proper research into rabies and animal health control in general.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Angela Browning): I have a sense of déjà vu, because one forfeit of becoming a junior Agriculture Minister was losing my place on the Select Committee so ably chaired by my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin). I am grateful to the Select Committee for prompting this debate, and I will attempt to reply to many of the questions that have been put, particularly by Select Committee members.
Last year's report was an invaluable investigation into the problems associated with the import of live animals. The members of the Committee must be congratulated on their clear and detailed analysis of the risks that our current arrangements present to our high animal health status. I pay tribute to the veterinary and medical professions for their contribution to the debate. It is clear that the two professions share the Government's cautious attitude to this important issue.
The Government welcome the Committee's endorsement of the health controls that have been put in place following completion of the single market in 1993. That vindicates the Government's approach in dealing with the threat of imported animal disease, although we are by no means complacent. We welcome the Committee's conclusion that the risk of disease entering the United Kingdom through imported livestock has not increased to any appreciable extent.
We are pleased at the support given by the Committee to the introduction in 1993 of strengthened measures designed to maintain the United Kingdom's high animal health status. We agree with the Committee that primary responsibility for protecting the United Kingdom's high animal health status under the new single market arrangements rests with the importers of animals.
In November 1993, my right hon. Friend the then Minister of Agriculture, Fisheries and Food, now Secretary of State for Education and Employment, announced newly strengthened measures to maintain Britain's high animal health status. Those measures, which remain in force, include 24-hour periods of blanket surveillance at all south and east coast ports, and targeting consignments where there is a particular animal health disease risk—with up to 100 per cent. checks and increased checks at points of destination so that, on average, between 50 and 60 per cent. of consignments are checked.
Where there is specific cause for concern, additional steps have been taken. They include 100 per cent. checks for warble fly on all cattle imported from France, serological testing of all cattle imported from eastern Europe for FMD antibodies, and increased checks at the point of destination of cattle from France and the

Netherlands for brucellosis. All those measures have played, and continue to play, a vital part in preventing the importation of disease.
My hon. Friend the Member for Weston-super-Mare and the hon. Member for Glanford and Scunthorpe (Mr. Morley) mentioned the Bendixen-Dexter report. We agree that it should be made available in full to all member states by the Commission. We shall continue to press for that, together with an indication of the action taken where inadequacies have been found. We consider that to be most important.
I am grateful to my hon. Friend the Member for Thanet, North (Mr. Gale) for his kind comments. We agree on most things, but we may not agree on everything tonight. My hon. Friend mentioned the new rules for protection against equine viral arteritis. Anyone interested in equine health will welcome that measure. When I have met interested parties in the past, I have had to say, "That measure is coming shortly." I am pleased that it is now in place. In addition, stallions imported from third countries to the Community must have originated from a country that has been free of EVA for at least six months, or the stallion's blood or semen must have been tested, with negative results for EVA, before export. That, I think, will be welcomed.
The hon. Member for North Cornwall (Mr. Tyler) mentioned several issues, one or two of which were picked up by others. He talked about BSE. When we receive scientific information, we put it in the public domain as quickly as is practically possible. The hon. Gentleman also mentioned the attitude of the Germans, who at times have been less than fair in the way in which they have assessed the stringent measures on BSE that we have taken.
We have made changes recently because, as new evidence has come to light, we have felt it important to act. We have changed the rules in feed mills, where we thought that there could have been cross-contamination for quite some time after the ban. Feed was being processed for the pig and poultry industries on the same lines, and that may have created some cross-contamination. We have tried to put that right, and the industry has responded well.
As for the case of the post-92 birth, the Germans and our partners in the Commission have renegotiated the two-and-a-half-year rule. I do not think that that will press the industry hard or cause it problems. It was important to act as the evidence emerged.
The hon. Member for North Cornwall also discussed maternal transmission. All the evidence shows that, if BSE had been caused by maternal transmission, it would not have resulted in the numbers affected. Those numbers are now falling, but we have never ruled out the vertical—

Mr. Morley: Ah.

Mrs. Browning: That is precisely the sort of irresponsible remark that brings the red meat trade of this country into disrepute. We have never ruled out categorically either vertical or horizontal transmission. That is why we have some pretty strong regulations. I know that the farming community finds them inconvenient, but we felt it necessary to ensure people's continued confidence in our red meat industry.
The hon. Members for North Cornwall and for Glanford and Scunthorpe also mentioned bovine TB. They know that I am concerned about that, and the hon.


Member for North Cornwall asked the Select Committee to look into it. I can assure him that the Government would welcome giving evidence to the Committee if it proceeds to do so.
As the hon. Gentleman will know, we are also examining OP dips, a subject that I take seriously. We are giving sheep scab and the problems of OP dips our fullest attention. I shall continue to work with the hon. Gentleman and with his committee to share any information that is available. I hope that he appreciates that.
Rabies took up the major part of tonight's debate. The hon. Member for Bristol, East (Ms Corston) said that the last death from rabies in Europe occurred in France in 1928. In fact, the last recorded death was in 1990, in Leipzig, which at the time was in East Germany but which is now in the Community. In Europe, there have been 198 cases of human rabies since 1977.
My hon. Friend the Member for Weston-super-Mare talked of the advantages for tourism and said that in France the subject is rarely spoken of. Furthermore, the hon. Member for Bristol, East said that this country is a laughing stock in Europe. I must tell them both that 10,000 people a year in France get rabies treatment as a precaution after bites and scratches. So this is not a trivial matter, and it is discussed in France. Those 10,000 people are concerned about their personal health. That helps to put the issue in perspective—[Interruption.] The hon. Lady should listen to the facts, instead of calling this country a laughing stock. We are not a laughing stock. We have taken careful and proper action to protect the health of our animals and the health of the human beings in this country.
Quarantine for rabies is, as tonight's debate has shown, a sensitive issue. It is also technical and scientific. I know that there are arguments from both sides of the House, and we heard many of them tonight, but we believe that one must recognise that rabies remains a serious health risk in many parts of the world, including mainland Europe, where, for example, there have been four deaths—in Hungary—in recent years. It is not just a matter for the Indian subcontinent, as it affects all of us on mainland Europe. Although both wild and pet animals can be vaccinated against the disease, and humans can be treated if the disease is caught in the early stages, it is an extremely unpleasant disease and once the symptoms emerge in man, the disease is invariably fatal.
When rabies was eradicated from the United Kingdom in the early part of the century, we believed that the consequences of the disease re-entering the United Kingdom would be severe and that there would be considerable public concern about it. An outbreak would lead to the destruction of wildlife over a wide area, and onerous controls would be put on pet owners until the disease was wiped out. We would have the same situation as that in France: anyone who was scratched or bitten would immediately feel the necessity to go and seek medical help. Whether or not a diseased animal was involved, the fear would be there in the population.
The Government therefore endorse the view expressed by the Select Committee in its report that it would never support a change in our rules that increased the likelihood of rabies entering the United Kingdom. We consider that that central principle must be borne in mind when considering any change. We believe that the quarantine rules have been effective since 1922.
It has been suggested that quarantine encourages smuggling and that an alternative system would reduce the risk of smuggling. Animals under three months cannot be vaccinated. They would then have a six-month period before they were free to travel, so we are looking at all animals under the age of nine months not being able to travel. It is often those sweet little kittens under nine months that people smuggle back into this country in their pockets. I am not convinced that the argument made tonight would in any way contribute to solving the problem of animals, particularly kittens, being smuggled into this country.

Sir Roger Moate: Can my hon. Friend therefore put at rest my fears about a story that was reported in the Sunday Express a few weeks ago, in which it was said that she was going to have a trial period for relaxing quarantine regulations between here and Cyprus and Malta?

Mrs. Browning: Indeed. I can confirm that to my hon. Friend. I wrote to the editor of the Sunday Express. He has not yet published my letter, in which I explain that that was not true. I hope that he will find the space to do so and put it on the record this Sunday.
This has been a detailed and, sometimes, quite emotional debate. It does bring out emotions, because people feel very strongly about their pets. Although hon. Members who take the opposite view from that of the Government may find it hard to believe, I am a cat owner and I would find separation very difficult. When it is safe to make changes, the Government will do so, guided by the principle that I mentioned at the outset. We will not support changes that increase the likelihood of rabies entering the United Kingdom.

Mr. Tyler: I very much appreciate the positive response from the Minister to the points that I raised this evening.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Sir Jerry Wiggin: I thank my hon. Friend for her reply. I am satisfied that we have won the argument this evening. I hope that the Government will allow common sense to overcome emotion, and that they will keep the matter constantly under review, observe our European partners, who have made these substantial changes, and after a short time, look at the whole matter again to relieve suffering, cost and danger to our community.

Question deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of estimates).

It being Ten o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the deferred Questions which he was directed by paragraph (5) of Standing Order No. 52 (Consideration of estimates), to put at that hour.

ESTIMATES, 1995–96

Class XIII, Vote 1

Question,
That a further sum, not exceeding £18,829,738,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Department of Social Security on non-contributory retirement pensions, Christmas bonus payments to pensioners, pensions etc., for disablement or death arising out of war or service in the armed forces after 2nd September 1939 and


sundry other services, on attendance allowances, invalid care allowance, severe disablement allowance, disability living allowance; disability working allowance; on pensions, gratuities and sundry allowances for disablement and specified deaths arising from industrial causes; on income support, payments of spousal and child maintenance, child benefit, one parent benefit, family credit, and on the vaccine damage payment scheme.

put and agreed to.

Class XIII, Vote 2

Question,
That a further sum, not exceeding £6,104,207,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Department of Social Security on rent rebate, rent allowance, council tax benefit, community charge benefit, community charge rebate and rate rebate subsidies and on sums payable in respect of anti-fraud measures to housing, charging, levying and local authorities; on transitional payments to help certain housing benefit claimants significantly affected by the changes to the housing benefit scheme and certain supplementary benefit claimants not entitled to benefit under the income support scheme; on sums payable into the National Insurance Fund to increase its income and as compensation payments in respect of statutory sick pay and statutory maternity pay and on sums payable into the Social Fund for expenditure on maternity expenses, funeral expenses and heating expenses in exceptionally cold weather.

put and agreed to.

Class XIII, Vote 3

Question,
That a further sum, not exceeding £211,869,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Department of Social Security on sums payable as grants to Independent Living; on subsidies to housing and local authorities towards the cost of administering the housing benefit scheme and to charging and levying authorities towards the cost of administering the council tax benefit scheme, as grants to Motability towards their administrative costs and to enable them to assist invalid vehicle users and others to have adapted and/or to purchase or lease cars from them, as grants to the British Limbless Ex-Servicemen's Association to enable them to assist certain other disabled vehicle users to have cars adapted, and on sums payable to the Social Fund to finance budgeting loans, crisis loans and community care grants.

put and agreed to.

Class XIII, Vote 4

Question,
That a further sum, not exceeding £1,450,436,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Department of Social Security on administration, for agency payments, the promotion of Government policy on disability issues, and for certain other services including grants to local authorities and voluntary organisations.

put and agreed to.

Class III, Vote 3

Question,
That a further sum, not exceeding £263,921,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for cash limited and demand led operational expenditure by the Ministry of Agriculture, Fisheries and Food to: promote food safety, take action against diseases with implications for human health, safeguard essential supplies in an emergency, and

promote action to alleviate flooding and coastal erosion; to encourage action to reduce water and other pollution and by other measures to safeguard the aquatic environment including its fauna and flora, to improve the attractiveness and bio-diversity of the rural environment and protect the rural economy; implement MAFF's CAP obligations efficiently and seek a more economically rational CAP while avoiding discrimination against UK businesses (including expenditure on existing CAP measures and schemes), to create the conditions in which efficient and sustainable agriculture, fishing and food industries can flourish, take action against animal and plant diseases and pests, encourage high animal welfare standards; provide specialist support services and allocate resources where they are most needed; provide for some inter-agency payments and undertake research and development.

put and agreed to.

Class III, Vote 4

Question,
That a further sum, not exceeding £181,719,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1996 for expenditure by the Ministry of Agriculture, Fisheries and Food on departmental research, advisory services and administration, executive agencies and certain other services.

put and agreed to.

It being after Ten o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the Question which he was directed by paragraph (1) of Standing Order No. 53 (Questions on voting of estimates,&c), to put at that hour.

ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1995–96

Resolved,
That a further sum, not exceeding £85,741,525,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 1996, as set out in House of Commons Papers Nos. 271, 272, 273 and 465.

Ordered,
That a Bill be brought in on the foregoing resolutions: And that the Chairman of the Ways and Means, Mr. Chancellor of the Exchequer, Mr. William Waldegrave, Mr. David Heathcoat-Amory, Mrs. Angela Knight and Mr. Michael Jack do prepare and bring it in.

CONSOLIDATED FUND BILL

Mr. Michael Jack accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March 1996; to appropriate the supplies granted in this Session of Parliament; and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 137.]

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c),

CONTRACTING OUT

That the draft Contracting Out (Highway Functions) Order 1995, which was laid before this House on 27th June, be approved.— [Mr. Bates.]

Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees),

PRELIMINARY DRAFT BUDGET FOR 1996

That this House takes note of European Community Document No. COM (95) 300, the Preliminary Draft Budget of the European Communities for 1996; and supports the Government's efforts to maintain budget discipline in the European Community.—[Mr. Bates.]

Question agreed to.

Public Health

Mr. Deputy Speaker (Mr. Michael Morris): With permission, I shall put together the two motions on public health.

Resolved,
That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 5) Order 1995 (S.I., 1995, No. 1714), dated 4th July 1995, a copy of which was laid before this House on 6th July, be approved.
That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 6) Order 1995 (S.I., 1995, No. 1737), dated 6th July 1995, a copy of which was laid before this House on 10th July, be approved.—[Mr. Raymond S. Robertson.]

Probation Service

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

Mr. Anthony Coombs: In initiating this debate on the probation service, I refer first to what the Home Secretary said in March this year when he introduced the current consultative paper, "Strengthening Punishment in the Community". He said:
The probation service can be rightly proud of its work and I appreciate the dedication and commitment shown by probation staff and members of committees in their work.
I was quoted in the 1993–94 Hereford and Worcester probation service annual report when I spoke approvingly of much of the work that it does and, in particular, of the community projects and their effect on reducing reconviction.
There is no doubt that the work of the probation service has increased dramatically. Last year, there were 233,000 pre-sentence reports, 2,000 of which were in Hereford and Worcester, which is itself a 12 per cent. increase on the previous year; 151,000 people were under probation service supervision, and there were 32,800 community sentences.
The probation service was involved in a huge area of work, some of it to do with the criminal justice system— liaison with the courts, prisoners and hostels and pre-sentence reports—and some outside the criminal justice system such as child welfare, family work and crime prevention in a more general context.
That increase in work occurred despite the fact that it in the current year its total budget has fallen from £395 million to about £392 million, which has been translated into a 6 per cent. reduction in Hereford and Worcester.
In 1993, the Minister of State, Home Office said:
If the probation service did not exist we would have to invent it".
The service does valuable work, and what I am about to say is in no way a criticism of the dedication that many probation officers bring to their task. "Strengthening Punishment in the Community" reminded us:
The present arrangements suffer from the drawback that probation and supervision orders do not appear to the public to offer sufficient punishment.
Commenting on the consultation document, The Times said that the Home Secretary had
taken measures to rid the public of the idea that community sentences are a soft option.
Unfortunately, many members of the public feel that probation and community service orders, and other community sentences, are not as rigorous as they should be, and that the probation service looks too much to its rehabilitative role and too little to its role in preventing further crime and protecting the public from crime by ensuring that sentences are not only rehabilitative but a deterrent to further offending.
There may be some justification for that view. Only 26 per cent. of indictable offences that come before the courts result in community sentences, and only 11 per cent. result in imprisonment. That means that some two thirds of offenders are either fined or given a non-custodial sentence of some other kind. The public do not consider that a sufficient deterrent. There has also been a huge increase in cautioning. Some of that may involve first


offences, but much does not. One can understand the feelings of many members of the public, including my constituents, who want elements of punishment to be returned to non-custodial sentences and community service orders.
Recently, there have been several cases of young people aged 14 or 15—sometimes they are as young as 11 or 12—acting in a grossly irresponsible and, indeed, criminal way in the leisure centre in my constituency. That has caused outrage in the community, but local magistrates seem powerless to effect a remedy.
Part of the problem appears to be the ethos of the probation service. It is very social-work oriented, as most of its members have a social-work qualification. The Hereford and Worcester 1994–97 plan for the probation service identified crime as a community problem, saying that one of the service's roles was to ensure that the community could respond to and reduce its offending. Although a third of the male population aged 30 may have some form of criminal record, the fact is that the vast majority of the community does not, and does not need to reduce its offending. My local police force tells me that, if just 20 offenders could be dealt with locally, crime could be reduced by some 50 per cent.
Too often, the probation service sees the offender, rather than the victim, as the actual victim. Although there is a correlation between dropping out of school, unemployment and family instability and crime, I do not think that the problem is as "reactive" as the probation service wishes to make out. According to the service,
Personal and social problems might put them"—
young people—
at risk of further offending",
as though offending were something that happened to people rather than their taking a specific decision.
In Hereford and Worcester's "Link" magazine, the assistant chief probation officer recently quoted approvingly some Liverpool university studies showing a correlation between unemployment and crime. We are all aware of that, of course. He said that this was bad news for the
let's get tough and punish lobby".
In other words, the probation service believes that the idea of punishment is something for the far right of the political spectrum rather than, as is the case, a reflection of the views of the vast majority of the population.
That is especially so as the Association of Chief Officers of Probation has quoted recent Home Office studies that show that, despite what the probation service might like to argue, the two-year reconviction rate of the probation community service is not much different from that of prison. I think that the relevant reconviction statistics are 53 per cent. for prisons, 49 per cent. for community service and 45 per cent. for probation, so the idea that probation is a major panacea against further convictions is erroneous.
In certain cases, the probation service seems totally unwilling to recommend custodial sentences as appropriate, despite the wishes of the population. The Hereford and Worcester annual report of 1993–94 showed that pre-sentence reports recommended a custodial sentence in only 11 cases in the whole year, despite the fact that 484 sentences were passed.
If we are to improve public confidence in the probation service, we need to change the culture. That is why I am especially pleased at the first of the Government's three major reforms, which will do away with the probation service's exclusive entry qualification: the certificate in social work. It is vital that we increase the number of people who come into the probation service by bringing in people from other sectors than social work.
As the Home Secretary has reminded us, the work of social workers and of probation officers is significantly different. People who have never been involved in social work have an important contribution to make to social work. If we can ease their passage into the probation service through additional qualifications, which must be nationally validated—they cannot be left entirely to local validation—we will be effecting a major and important reform.
Equally, I agree that there should be a more flexible continuum between community service orders and probation orders. Community service orders are oriented more towards punishment; probation orders are oriented more towards the prevention of further offending. Any effective order should contain significant proportions of both. Community service orders and probation orders should be available to the courts for all offences and not for ones that are merely imprisonable.

Mr. Michael Fabricant (Mid-Staffordshire): I appreciate that my hon. Friend has only just begun to expand his argument, but it seems that he is arguing very well for the total abolition of the probation service. Is he not saying that the service is no more effective—in fact, probably less so—than prison and other sanctions in stopping people committing other crimes, and that it is not a deterrent?

Mr. Coombs: There are other reasons for doing non-custodial work apart from those involving deterrence. The probation service has an important role to play, but the element of punishment and deterrence in its work has been undervalued and, as a result, the Government's reforms, in particular those in relation to the greater control by magistrates of the details of community sentences, are extremely important.
I shall give an example of what can go wrong. I recently took up the case of some constituents who were worried about a hostel and the activities of its residents. It is not directly supervised by the probation service, but there is a liaison officer. I was told by the probation service's chief officer that she understood that, in the past two years, hostel residents had committed no offences. I checked with the police and found that its residents had committed 343 offences in 1993 and 390 offences in 1994–26 per cent. and 27 per cent. of the crime in the town in which the hostel is situated. Is that an example of protecting the community via community service in hostels?
I should like to emphasise one or two other areas in which the work of the probation service could be significantly improved. I have already mentioned the very young criminal. I should like to see the minimum age for community service orders reduced from 16. At present, for a 15-year-old offender in my area, magistrates can impose a fine, which may not be paid because parental fines are difficult to enforce under the present legislation, or he could be locked up in a youth offenders' institution but, understandably, magistrates are reluctant to do that.


We no longer have an attendance centre in Hereford and Worcester, so that is not an option and supervision is too often not effective to the extent that the Home Office has recently had to lay down standards saying that the impression should not be given of providing reward for offending. It is my view that community service orders, which can be made rigorous, should be extended to 14 and 15-year-olds under any new legislation.
I believe that, short of youth custody, attendance centres and boot camps should be established on the lines of those set up by the airborne initiative in Scotland and down on the south coast—and, hopefully, soon in the midlands. About two thirds of those who successfully get through those camps do not reoffend. I believe that probation supervision grants, which are currently not available to fund the capital costs of such schemes, should be made available so that more of them can be set up. I believe that better co-ordination is necessary between the probation service and local employers and training and enterprise councils. Someone who is offered a job after having been on a community service order is less likely to reoffend. That is beyond peradventure. Very good work is going on in the Hereford and Worcester area through the Doors project.
The criminal justice system for juveniles is too slow. It can take anything from six to nine months between an offence being detected and arrest being made and a punishment being imposed by the courts. A pre-trial meeting is necessary with social services, which means a delay of two or three months, then the trial itself, pre-trial sentence reports cause further delays and then sentencing. Because there is no immediacy, it is difficult to identify the offence with the punishment in the minds of the young offenders. That is a view held by the clerks to the magistrates in my local area, and I am sure that the Government will wish to investigate it.
Currently in Hereford and Worcester, nine of the 15 members of the probation committee are magistrates. Magistrates do have an important role to play, but it is not an exclusive role. I believe that the scope of probation committees should be extended to include laymen who are looking for a more deterrent and retribution-oriented community service provision.
It is crucial that we change the way in which sentences, whether custodial or non-custodial, are organised for young offenders in particular. Too often, the sentence increases in severity with the criminal record of the individual involved. I understand that it is important that individuals are not unduly involved in the criminal justice system at too early an age. However, in certain circumstances, it is important to frighten young people away from a life of crime, especially if it looks as if they are just about to begin one.
I am not convinced—and certainly many people involved in the magistracy in the Hereford and Worcester area are not convinced—that there are sufficiently severe and deterrent penalties available for young people at the beginning of their criminal careers to deter them and their friends from further criminal activity. A magistrate's clerk recently explained to me that, sadly, under the present structure there is no question of frightening the life out of a 17-year-old, thereby preventing further criminal behaviour, if he has gone a long way down the tracks towards a criminal career.
What is beyond peradventure is that, if the criminal justice system is to work effectively, either through custodial sentences or through non-custodial community sentences, it must concentrate not only on rehabilitation, the needs of the offender, his place in society and appropriate programmes to prevent reoffending but on the certainty and rigour of punishment—deterrence as well as rehabilitation—because only then will the confidence of the community as a whole in the criminal justice system— and, by implication, in the work of the probation service—be maintained.
The Home Secretary has spoken about the current consultation document and strengthening punishment in the community. If he wants, as he has said, to rise to the needs of the 21st century in significantly reducing crime and the causes of crime, the sort of change in culture and in operational procedures that I have mentioned will be crucial to improving and maintaining public confidence in the criminal justice system.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Nicholas Baker): The title of this debate is the probation service, but the issues raised by my hon. Friend the Member for Wyre Forest (Mr. Coombs) go much wider than that. There is rightly a great deal of concern about the high levels of crime committed by a small number of young people. We are determined to tackle the problem of persistent offending by juveniles, and I am grateful for this opportunity to explain some of the action that the Government are taking to combat it.
I know that my hon. Friend will be meeting my colleague the Minister of State shortly to take these discussions further. In the time remaining to me tonight, I shall try to cover the points raised by my hon. Friend, but if I do not cover them all I am sure that his discussions with the Minister of State will provide an opportunity to continue the debate. I think that my hon. Friend will be pleased to learn that what he says and what the Government are doing have a great deal in common.
The supervision of juvenile offenders in the community, as my hon. Friend is undoubtedly aware, is for the most part the responsibility of social services departments. He also raised a number of issues relating to the probation service and I am grateful to him for that. There are too few opportunities to debate the work of the probation services and the contribution they make to the prevention of further crime and to the protection of the public. I therefore welcome this valuable opportunity to explain the action that we are taking to toughen up community penalties, to which my hon. Friend referred, and to strengthen the performance of the probation service.
I understand that my hon. Friend visited Hereford and Worcester probation service's community services schemes last summer and was impressed. I am delighted to hear that, but I am not surprised. Probation services have moved a very long way from their original welfare-oriented approach, especially in recent years. The Criminal Justice Act 1991 turned the probation order into a sentence of the court, and it now takes its place as part of one of a range of community penalties available to the courts.
The Government have taken a number of measures to ensure that probation services deliver a high standard of service to the courts and that they deliver tough and


demanding punishments and protect the public from the risk of further crime. The prevention of reoffending is an important part of that work, but I think that my hon. Friend underestimates the extent to which the ethos of the probation service has moved away from rehabilitation. The 1995 national standards, to which I shall refer in a moment, ensure that that objective is properly placed against the need for supervision and enforcement of community sentences.
I shall say a word about the problem of persistent offending juveniles, to which my hon. Friend referred. The vast majority of young people are perfectly law-abiding, but that makes the behaviour of a small number even more inexcusable since it tarnishes the image of young people, most of whom lead responsible lives and contribute a great deal to their communities. However, persistent offending is a significant problem.
A high percentage of crime in any particular area is most often found to be committed by a small number of offenders, sometimes very young offenders. My hon. Friend referred to that. For example, one study of persistent offending found that, by age of 17, 1 per cent. of all boys born in 1973 were responsible for 60 per cent. of convictions in their age group. We are determined to tackle this problem of persistent offending. To do so, it is essential that the courts have available to them effective and appropriate powers.
My hon. Friend referred to the remedy of secure training centres. I would like to say a word about that because, where the crimes are serious enough, it is right that the courts should have a range of tough measures to deal with them, from custody to community sentences. In particular, when young offenders go on and on committing crime, rejecting the chances offered them by courts to change their ways through supervision in the community and continuing to cock a snook at the public, the law and society, then the courts should have tough sanctions against them. There, my hon. Friend's point about early penalties being more effective may well be relevant to what we have in mind.
The Government introduced in the Criminal Justice and Public Order Act 1994 a new sentence—the secure training order—to strengthen the courts' powers in respect of 12 to 14-year-olds who persistently offend and who fail to respond to a community sentence. It will provide the courts with a much-needed sentence for this group of offenders combining a period of high-quality training in detention with a close supervision after that in the community. The order can be for as long as two years.
We are now pressing ahead with the building of five new secure training centres. Invitations to tender for the provision of secure training centres at Gringley,

Nottinghamshire and Cookham Wood, Kent are currently been assessed. Invitations to tender for building and running the other three centres will be issued as soon as the necessary planning consents have been granted.
The courts also need a range of tough community sentencing options for those offenders who commit crimes which are not sufficiently serious to warrant custody but which ensure that offenders pay for their actions. Community sentences have a crucial part to play in punishing offenders in appropriate cases and in ensuring that offenders put back something into the community. The Government are determined that community sentences should be rigorous and that probation services take quick action, if offenders continue to misbehave, to return them to court.
I said that I would say something about national standards, because that is why, in March, my right hon. and learned Friend the Home Secretary published new national standards for the supervision of offenders in the community. They apply equally to probation services and social services departments. The new 1995 national standards are designed to deliver greater protection of the public from further crime and more vigorous enforcement of community sentences by probation and social services departments. These new standards ensure that offenders serving community sentences face demanding programmes of supervision or work or both, in which the courts and the public can be confident that supervision will be physically or mentally demanding and that no community sentences can be properly or validly described as a soft option—as some do describe them, as my hon. Friend remarked.
The public want to see offenders make reparation to the community, and they want to feel safe. The new standards emphasise the development of programmes of supervision, which have those objectives as their primary aim. That means that the loophole in the old standards, which resulted in a number of offenders going abroad, looking like a reward for their offending, has been closed. Every activity must now be assessed to ensure that it cannot be seen as a reward for offending.
I have run out of time and must conclude by urging my hon. Friend to continue his discussions with the Minister of State. As I said at the beginning, I am grateful to him for raising this issue so that I could remind the House of some of the Government's recent initiatives to combat serious and persisting juvenile crime and strengthen community sentences. I have listened to my hon. Friend's concerns with great interest, and I hope that he will continue his interest in this important subject, to which he has made an important contribution.

Question put and agreed to.

Adjourned accordingly at half-past Ten o'clock.